Australian CPI (a key measure of inflation) was released earlier today, with the CPI rising 0.2% in the March quarter for an annual rate of 1.3%. This will no doubt leave the door wide open for the RBA to cut interest rates again. The question remains on whether they do so next month or wait a little longer.
On the other hand, Australia’s jobless rate unexpectedly fell to 6.1% in March as hiring increased, spurring optimism the RBA’s effort to shore up the economy is paying off.
The RBA has the delicate and critical job of transitioning the economy away from slower mining investment and extend almost 24 years of growth. It is trying to re-balance the economy away from mining in the north and west, and stimulate manufacturing, residential construction and consumption in the nation’s south and east.
The central bank aims for inflation of between 2 – 3% on average.
The Australian dollar (AUD/USD) reacted to the news by surging higher to above 0.7770 within minutes before settling down near 0.7760.