The already uptrend Aussie dollar extends its gains as the Australian Bureau of Statistics (ABS) reported better-than-expected fourth-quarter inflation figures. Australia’s Consumer Price Index (CPI) rose 0.9% quarter-on-quarter in the fourth quarter, leaving behind the estimate of a 0.7% rise but it is down from the preceding quarter’s 1.6% rise. In December, the ABS had warned of an uptick in inflation due to a jump in childcare costs. The CPI rose 0.9% in annualized terms versus expectations of 0.7%.
The Reserve Bank of Australia’s Trimmed Mean CPI rose 0.4% and 1.4% as expected in quarter-on-quarter and annualized terms, respectively.
Analysts at Westpac offer their afterthoughts on the Australian Q4 CPI beat ,The key notes were “The CPI is still being influenced by government taxes and subsidies which have been pushing and pulling on the data. However, outside of dwelling prices we found little to suggests more broad-based inflationary pressures.”
“The main surprise compared to our forecast was how the surge in housing demand lifting dwelling prices to swamp the benefit of the Home Builders Grants. In many capital cities developers were able to lift prices in excess of the value of the grants, even in Perth and Hobart were the Federal Grant ($25,000) was supplemented by state government grants ($20,000).“
On the other hand, The U.S. dollar was pressured by expectations the Federal Reserve would stick with its ultra-easy policy at a meeting later on Wednesday and play down the need for tightening anytime soon.
The Biden administration said Tuesday that it would purchase 100 million doses each of the vaccines made by Pfizer Inc and Moderna Inc, with making an increase of overall total doses to 600 million.
Meanwhile, the International Monetary Fund (IMF) revised the 2021 global economic growth forecast higher to 5.5% versus 5.2%.
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