By John Galt
July 26, 2011
The chart for the Aussie dollar versus the U.S. dying dollar says it all as it hit a new all time record high tonight:
(Chart from INO.com and updates automatically)
The sharp spike happened shortly after the news on the Australian Consumer Price index (From the Sydney Morning Herald):
July 27, 2011 – 11:39AM
The consumer price index (CPI) rose by 0.9 per cent in Australia in the June quarter, for an annual inflation rate of 3.6 per cent, official data shows.
Economists’ forecasts for the headline consumer price index (CPI) had centred on a rise of 0.8 per cent in the quarter, for an annual pace of 3.5 per cent.
The trimmed mean CPI rose 0.9 per cent in the June quarter, for an annual growth rate of 2.7 per cent, data from the Australian Bureau of Statistics showed on Wednesday.
The weighted median CPI rose 0.9 per cent in the June quarter, for an annual rise of 2.7 per cent.
The ABS calculates the trimmed mean and weighted median measures on behalf of the Reserve Bank of Australia (RBA), which uses them to gauge the underlying trend in inflation.
Unlike the headline CPI, the RBA’s underlying measures are subject to revision due to the seasonal adjustment of some of their components.
The RBA adjusts the cash rate to keep the inflation rate in a target band of two to three per cent on average over the medium term.
Ouch. From the Australian Bureau of Statistics it would appear they have more work to do on taming inflation, thus explaining the spike in the AUD tonight as interest rates will be heading higher: