Australian Dollar Rallies on CPI, Trims Gains Later

The Australian dollar rallied today on a positive inflation report but has trimmed its gains by now, erasing them outright against some rivals. The New Zealand dollar managed to rise against its Australian counterpart but has erased its gains by now as well.
The Australian Bureau of Statistics reported that the Consumer Price Index rose in the March quarter from the previous three months. That was a slowdown from the previous quarter’s 0.7% rate of growth but a better reading than the analysts’ median forecast of a 0.2% increase. Year-on-year, the index rose 2.2%, exceeding the median forecast of a 1.9% increase. The trimmed mean CPI rose by 0.5% on a quarterly basis, beating the analysts’ predictions of a 0.3% increase, and by 1.8% on an annual basis, above the consensus forecast of a 1.6% gain. The main contributors to inflation were vegetables, tobacco, secondary education, and pharmaceutical products. On the other hand, the biggest price falls were registered in automotive fuel, domestic holiday travel and accommodation, and international holiday travel and accommodation.
Some analysts argued that the Aussie got a boost from rallying global stocks and rising crude oil prices on top of the positive domestic macroeconomic data. Indeed, prices for crude logged substantial gains today, with North American oil adding more than 13% to its value.
AUD/USD was up from 0.6488 to 0.6547 intraday before pulling back to 0.6516 by 11:18 GMT today. EUR/AUD traded at about 1.6651 after opening at 1.6668 and falling to the daily low of 1.6578. AUD/JPY was about flat at 69.35 after rallying to the high of 69.74 earlier. AUD/NZD opened at 1.0713, fell to the daily minimum of 1.0672 but rebounded to 1.0702 later.

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Original from: www.earnforex.com