Wednesday, 25 July 2012 11:53
WELLINGTON/SYDNEY: The Australian dollar regained some ground on Wednesday after a reading on inflation cooled expectations of an interest rate cut next month, but the high-beta currency still nursed losses on the week amid fears of a euro zone break up.
The Aussie was last at $1.0223, having slid as low as $1.0170, versus $1.0227 late in New York. It was still down 1.3 percent for the week.
The Aussie managed to cut early losses after a closely watched inflation report came roughly in line with expectations. The outcome was not considered soft enough to prompt the Reserve Bank of Australia (RBA) to cut rates as early as August.
Interbank futures now imply a one-in-four chance of a cut to 3.25 percent next month, down from 60 percent on Tuesday.
Yet, the 1.95 percent pace of annual underlying inflation was more than tame enough to keep the door open to more easing should the ...