Forex Tips - Inflation wars - Australia, New Zealand, Singapore

In this Asia Focus Andrew Robinson, correspondent for Saxo Capital Markets, continues to draw attention to inflation in the region, analysing in particular Australia’s second quarter CPI data and the outlook for interest rates Down Under and in New Zealand. He also looks at Singapore's battle with inflation and how a stronger SGD is helping on the domestic front.

Australia’s inflation is very much on the rise, confirmed a Consumer Price Index report for the second quarter. The index increased 0.9% from the first quarter and 3.6% versus the same period one year ago, slightly higher than expectations. The higher than expected numbers have somewhat changed the landscape for interest rates and the AUDUSD reacted strongly, hitting new records. Now a rate hike is more likely to be on the cards than a rate cut by the end of the year. A rate change however is first likely to occur at the RBA's November meeting rather than its August meeting.