Australian Dollar (FXA) Dives After Weak Inflation Report

The Australian Dollar (AUD) plunged against all of the major currencies during Asian trading hours after the inflation numbers came out slightly lower than analysts had forecasted. The consumer price index rose only for 0.7% from the previous quarter vs. 0.8% expected, while over the year the increase was by 2.8%, while the general forecast was for 2.9%. Even though the difference between the expectations and the actual data was very little, it still was a reason enough for a rapid strong sell-off in the Australian currency. It seems that the market quickly and significantly lowered the chances of the rate hike by the RBA at their next meeting on monetary policy, as the consumer price index, the most important gauge used by the central banks around the world to measure inflation, stays within the target range. Immediately after the data release the AUD plunged against the US Dollar (USD), Euro (EUR), Japanese Yen (JPY) and virtually against every other major currency. The AUD/USD fell from 0.9860 to a one week low 0.9719. The EUR/AUD, meanwhile, skyrocketed from 1.4062 to 1.42 and the AUD/JPY plunged from 80.28 to 79.43.