Australia Inflation jump by 0.5% against expected 0.4%, likely event of Feb Rate Rise

from MoneyTrading.com.au

Australia's inflation rate picked up in the December quarter, adding to the likelihood of a rate hike next week. The consumer price index rose by 0.5 per cent in the three months to December, the Australian Bureau of Statistics said. Economists had been expecting a 0.4 per cent gain for the quarter. Inflation on an annual basis rose 2.1 per cent, also slightly more than the 2 per cent pace expected by analysts. The Aussie dollar rose on the news as investors bet the chances of another rate rise by the central bank had increased in light of the inflation figures

Aussie Dollar well supported in anticipation of a fourth consecutive interest rate rise in February.

from MoneyTrading.com.au

We are waiting for the consumer price index on Wednesday to be announced at 11:30am. With no market data due during the rest of Monday's domestic session before Tuesday’s Australia Day holiday; Aussie Dollar may be trade a tight range.

The median market forecast of the CPI is for prices to have risen by 0.4 per cent in the December quarter of 2009, for an annual rate of 2.0 per cent. The CPI measures inflation, which is the focus of the RBA's monetary policy.

Economists have all but locked in a 25 basis point rate rise in February, a move that would be the RBA's fourth in as many meetings and take the official benchmark interest rate to four per cent.