Australia’s Inflation May Pose Problems for RBA

Australia’s core consumer prices gained more than economists forecast last quarter, sending the Australian dollar to its highest in two weeks and creating a hurdle to further monetary policy easing.

The trimmed mean gauge rose 0.8 percent from the previous quarter, the Bureau of Statistics said, compared with the median forecast of 25 economists for a 0.6 percent gain.

The currency rose as investors pared bets on a further cut to the record-low 2.5 percent benchmark cash rate. Accelerating inflation poses a dilemma for central bank Governor Glenn Stevens, who this month resumed signaling that he’d prefer a weaker currency and is facing a slowdown in growth as mining investment wanes and the government cuts spending.

Bloomberg

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