The Australian dollar is rising against the US dollar on Wednesday. The current AUDUSD exchange rate stands at 0.6650.
Australia’s April inflation statistics further bolster the Aussie’s strength. The consumer price index increased to 3.6% y/y from 3.5% in March. Intensifying inflationary pressure is not an unexpected unpleasant surprise for the Reserve Bank of Australia but a predictable and anticipated development. The RBA’s stance is to patiently wait for price pressure to stabilise, with no plans to lower the interest rate before May next year.
Meanwhile, the RBA’s recently published meeting minutes mentioned the likelihood of an interest rate hike, if necessary. Although monetary policymakers seriously consider such a scenario, they reject it as unideal.
Australia’s latest statistics increase the risk of inflation remaining above the target level for an extended period. While the RBA acknowledges this risk, it does not intend to take urgent action.