Australian core consumer prices rise 0.6%, matching forecasts

[SYDNEY] Australia's core consumer prices matched economists' forecasts last quarter sending the currency higher as traders bet the central bank will keep interest rates on hold in the near term.

The trimmed-mean gauge of core prices rose 0.6 per cent from the previous quarter, the Bureau of Statistics said Wednesday, matching the median forecast of 23 economists. The consumer price index advanced 0.7 per cent from the prior three months, compared with economists' forecast for a 0.8 per cent increase.

Reserve Bank of Australia Governor Glenn Stevens has cut the benchmark interest rate twice this year to a record-low 2 per cent. Policy makers are trying to reinvigorate domestic industries to spur hiring as they seek to extend 24 years of growth and are likely to look through inflation driven higher by a weaker currency and higher oil price.

The data "reflects the drop in the Aussie dollar" and "the rebound in petrol prices," Michael Blythe, chief economist at Commonwealth Bank of Australia, said in a research report ahead of the release. "The outcome should be consistent with the RBA leaving the current 2 per cent cash rate in place."

BLOOMBERG