During early Asian trading on Wednesday, the Australian dollar edged higher against its major rivals following a government report showed that Australia’s inflation in the fourth quarter rose more than analysts had predicted.

The Australian Bureau of Statistics reported today that the consumer price index increased 0.5 percent in the fourth quarter from the previous quarter. The CPI rose 2.1 percent from one year earlier.

Most economists were expecting CPI to rise 0.4 percent on quarter and 2.0 percent on year. The Reserve Bank of Australia’s Weighted Median CPI was up 0.7 percent in the fourth quarter compared to the quarter before, and was up 3.6 percent on year.

Earlier in the day, a report released by the Westpac Bank and Melbourne University showed that Australia’s leading Index increased to an annualized rate of 7.6 percent compared with 5.8 percent growth in October.

The coincident index, which measures current economic activity, increased at an annualized rate of 0.5 percent in November, compared to October’s flat reading.

The Australian dollar climbed to a 7-week high of 1.2759 against the NZ dollar by 7:40 pm ET, compared to 1.27 hit late New York Tuesday. The aussie-kiwi pair is presently worth 1.2755 with 1.2840 seen as the next likely resistance level.
 
Against the euro, the Australian currency advanced to a 5-day high of 1.5595 at this time and this may be compared to yesterday’s close of 1.5667. If the domestic unit gains further, it may challenge resistance near the 1.5570 level. The euro-aussie pair is presently quoted at 1.5615.

The Australian dollar rose to near a 2-week high of 0.9604 against the Canadian dollar at 7:40 pm ET and moving a few pips up may push the pair to its strongest level in more than 2 weeks. The aussie-loonie pair, which closed yesterday’s deals at 0.9553, is presently quoted at 0.9586.

The Australian dollar also drifted higher to 0.9035 against the US dollar and 81.03 versus the Japanese yen before holding steady around 7:30 pm ET. The aussie that closed yesterday’s deals at 0.8987 against the greenback and 80.57 versus the yen is currently quoted at 0.9020 and 80.82, respectively.

The Japanese merchandise trade surplus widened to JPY 545.3 billion in December, the Ministry of Finance data showed today, compared to a revised 371.3 billion yen in the previous month. Analysts had expected JPY 610.0 billion surplus in the month.

Exports rose 12.1 percent in December from a year earlier, while the imports edged down 5.5 percent.

Looking ahead, the two-day monetary policy meeting of the US Federal Reserve began on Tuesday and will conclude in the afternoon. Analysts forecast the Fed’s federal-funds interest rate to remain at the range of zero to 0.25%.

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