[SYDNEY] Australia's core consumer prices gained more than economists forecast last quarter, easing pressure on the central bank to reduce interest rates further. The Australian dollar jumped.
The trimmed mean gauge of core prices rose 0.7 per cent from the previous quarter, the Bureau of Statistics said in Sydney today, compared with the median forecast of 23 economists for a 0.5 per cent gain. The consumer price index advanced 0.2 per cent from the previous three months, compared with economists' forecast for a 0.3 per cent increase.
The currency rose as investors pared bets Reserve Bank of Australia Governor Glenn Stevens will lower the record-low 2.5 per cent benchmark rate in the near term. The central bank is trying to reinvigorate domestic industries to spur hiring as it aims to steer a transition in the economy and extend more than 23 years of growth.
"Look for rates to remain unchanged at the Feb 3 meeting," Kieran Davies, chief economist at Barclays Plc in Sydney, said in a research report before the release. "That said, we think the RBA will probably drop the long-standing forward guidance of a period of stable rates, adopting instead a more general wording." The currency, which declined 6.5 per cent last quarter, strengthened, buying 79.96 US cents at 11:36 a.m. in Sydney compared with 79.16 immediately before the data.