Aussie Dollar Plunges As Inflation Slumps To Record Low

from Zero Hedge

Despite surging commodity prices in China – which must be real and represent demand growth and price increases, right?Aussie core inflation slowed to the weakest on record as headline prices unexpectedly fell last quarter (CPI -0.2%). RBA Rate-cut odds tripled instantly sending AUD down over 1.2% (its biggest drop in 2 months). Perhaps, just perhaps, that collossal credit injection in Q1 via China did not make it into the AsiaPac economy after all and merely fueled a speculative frenzy in commodities that merely “looks” like a recovery?

The Reserve Bank of Australia looks at two core inflation measures — trimmed mean and weighted median — and Wednesday’s report showed:

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