Small AUD/USD Spike as Australian PPI Rises Faster than Expected in Q1

Australian producer prices rose at a faster-than-expected quarterly pace in Q1. PPI increased 1.0% on the quarter versus the consensus forecast for a 0.6% gain to follow the 0.4% decrease in Q4 of last year. Meanwhile, producer prices declined 0.1% on the year in Q1, above calls for a 0.6% drop after the 1.5% fall in the final quarter of 2009. Following the upside surprise in the data, AUD/USD firmed by almost 0.2 U.S. cents to touch $0.9286USD, just one pip south of the pair’s intraday high, before declining. The PPI report suggests that Australian consumer prices, released next week, may have risen by more than economists had expected. If so, the RBA will come under pressure to continue to increase interest rates to counter inflation.