By: Barbara Zigah
In Asian trading today, the Australian Dollar tumbled against major rivals following the release of consumer inflation data which came in below economists’ expectations, and which sent a signal to investors that the Reserve Bank of Australia is unlikely to raise interest rates any time soon.
As reported at 2:59 p.m. (JST) in Tokyo, the Aussie fell against the U.S. Dollar, trading at $0.9950, a decline of .1%; versus the common currency Euro, the Aussie slipped .2%, to trade at AUD1.3700, nearing a 2-month peak struck yesterday.
Euro News
The Euro, meanwhile, is continuing its recent rally against the U.S. Dollar, trading last at $1.3650, off an earlier inter-session high of $1.3685; resistance is now pegged at $1.3742. Investor speculation of a rate hike from the European Central Bank is driving the rally, especially given the hawkish stance recently adopted by ECB president, Jean-Claude Trichet.
Support for the Euro is also coming from rising Asian central bank demand, which prompted some market speculators to reverse positions last week. Some analysts suggest that the Euro has room to appreciate further. Likewise, growing optimism that the Eurozone policymakers are moving closer to finding a long term solution to the Eurozone sovereign debt problems is giving support to the common currency.