Consumer inflation, as reported by the Reserve Bank of Australia (RBA) this morning, seems to have held steady at 0.6% in October. But the Trimmed Mean CPI, which is similar to the Core CPI reading of other countries since it excludes the most volatile items, revealed sluggishness with only 0.3% growth despite forecasts for a higher reading.
The consumer price index (CPI) measures the change in price paid by consumers and represents one measure of economic growth. If prices are increasing, it can be due to any one or a combination of several factors including higher demand, rising energy costs, rising manufacturing costs, lower supply, longer transportation times (i.e. higher transportation costs) due to increased traffic during the holidays, etc. The sluggish reading suggests that the core of Australia’s inflationary growth is being held lower which may affect the Aussie’s (AUD) value over time.
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Greg Holden is the Chief Market Analyst at ForexYard. Greg uses his detailed knowledge of fundamental and technical analysis to provide some of the leading market forecasts in the forex world today. A guest lecturer at forex symposiums and Chief Editor of ForexYard's analysis center, Greg brings highly detailed and easy-to-use market analyses to his clientele. He has been published on ForexYard's Trading Blog and affiliate websites. Greg holds degrees in Political Science and Economics from Missouri State University, as well as a Masters degree in Middle Eastern History.
