Australian Core Inflation Quickens; Currency Gains as Rate-Cut Bets Pared

Australia’s core inflation rate accelerated above the middle of the central bank’s 2 percent to 3 percent annual target range last quarter, prompting traders to pare bets on another interest-rate reduction next month. The annual trimmed mean, which diminishes sharp price swings, quickened to 2.6 percent from the third quarter, when it rose a revised 2.4 percent that was faster than previously reported, the Bureau of Statistics said in Sydney today. The overall inflation rate was unchanged last quarter from the prior three months as the price of bananas plunged 46 percent. The currency rose as futures traders saw about a 50-50 chance Reserve Bank of Australia Governor Glenn Stevens will reduce the benchmark rate for a third straight meeting to 4 percent, compared with 21 of 22 economists surveyed by Bloomberg News who predict a cut. Stevens lowered borrowing costs in November and December as Europe’s debt crisis dimmed prospects for global growth.