By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The recently beleaguered U.S. dollar skidded to a record low against its Australian counterpart Wednesday, after hotter-than-expected inflation data increased the likelihood of more tightening ahead from the Reserve Bank of Australia.
Second-quarter consumer price index inflation hit 0.9%, compared to a rise of 1.6% in the March quarter, the Australian Bureau of Statistics reported. Read more on Australia CPI data.
The Australian dollar AUDUSD +0.96% was buying $1.1040, up from $1.0960 in late North American trading Tuesday. After the data, it rose as high as $1.1062 — its loftiest level since it was floated in 1983.
“Today’s inflation is a game-changer for market rate expectations,” said Barclays Capital economists Gavin Stacey and Joaquin Vespignani.
The data are likely to focus the market’s attention back on domestic factors and the probability that the Reserve Bank of Australia has “unfinished business on the tightening front,” they said in a note to clients Wednesday.
While an interest-rate hike in August “remains an outside chance,” they added that “a more hawkish statement appears likely.”
The Australian data added to already formidable pressure on the U.S. unit this week, as a prolonged standoff in Washington over hiking the U.S. debt ceiling continued. The dollar remained in recently weak ranges, but it clawed back lost ground from Tuesday’s lows against most major rivals.
House Speaker John Boehner was rewriting his bill, so the House may end up voting on the bill on Thursday rather than the initially scheduled Wednesday vote. Read more on Boehner rewriting debt bill.
The dollar index DXY +0.06% , which tracks the U.S. unit’s performance against a basket of six other currencies, was at 73.511, compared with 73.501 late Tuesday.
The euro EURUSD -0.28% edged down to $1.4504 from $1.4514 late Tuesday. See real-time currency quotes and tools.
Against the yen, the dollar USDJPY -0.33% stood at ¥77.81, compared to ¥77.90 late Tuesday.
Versus the Swiss franc USDCHF -0.21% , the dollar changed hands at 80.20 Swiss centimes, compared with 80.10 centimes late Tuesday. There are 100 centimes in a Swiss franc.
The greenback hit an all-time low versus the Swiss unit at 79.96 centimes on Tuesday. Read Forex Files column on the Swiss franc and turmoil in Europe and the United States.
The British pound GBPUSD +0.01% bought $1.6427, compared with $1.6411 late Tuesday.
