Australia inflation data send currency higher

MarketWatch.com - MarketPulse LOS ANGELES (MarketWatch) -- Australia s consumer prices for the October-December quarter came in higher than expected, pushing up the Australian dollar as the market priced in a slightly lower chance of further easing by the central bank. The consumer price index rose 0.8% last quarter, or 2.7% from a year earlier, the government said Wednesday, while economists surveyed by The Wall Street Journal had forecast on average a quarterly rise of 0.5%. A seasonally adjusted version of the data showed a 0.9% increase -- or 2.6% from the year-earlier quarter. While that remained within the Reserve Bank of Australia s 2%-3% target range, it prompted the markets to cut the odds of a possible interest-rate cut in the near future. According to Reuters, the chances of a cut by July as implied by interbank futures fell to 20%, down from 50% just ahead of the data release. The result prompted a sharp gain for the Australian dollar to near 88.70 U.S. cents from 87.80 U.S. cents ahead of the data.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.