FX Daily Wrap Up

This morning the Australian Dollar had a bit of a dip on a weaker-than-expected inflation report for the fourth quarter, with the AUD/USD pair losing 110 pips in under an hour. Consumer prices, as measured by the Australian Bureau of Statistics, dropped for the first time in almost eight years at a quarterly rate of 0.1 percent, which brought the total annual rate to down to 3.3 percent. The current target for the Reserve Bank of Australia is a figure around 3.0 percent, so this decline is in line with the larger game plan. Weaker oil prices led the decline, as gasoline costs fell 12.4 percent. The Australian Reserve has a reason for relief from inflationary pressure for the moment with current reports stating a less-than-expected 0.5 percent during the quarter, leaving the annual figure stable at 2.9 percent. Governor Steven is far less likely to tighten monetary policy in February after hiking rates three times in 2006 to bring the Australian rate to a six-year high of 6.25 percent. As we move into the Asian trading sessions, the AUD/ USD pair is trading at .7800, a sharp decline from yesterday’s high of .7935. XPRESSTRADE Analyst David Hilgeman