Surprise! Unexpectedly the pressure of inflation in Australia continued to rise in the fourth quarter by jumping to a new high since 1990.


Australia's annual Consumer Price Index (CPI) jumped to 7.8% in the quarterfinals of 2022 from 7.3% recorded in the third quarter and surpassed market expectations for a 7.5% increase.


While core inflation increased to 6.9% compared to 6.5% predicted the market, and rose from 6.1% of previous readings.


On a monthly basis, CPI increased to 8.4% in December from 7.3% in November and was higher than the projection for a 7.7% increase.


According to the Australian Bureau of Statistics (ABS), the spike is driven by higher prices for food, automotive fuel and new residential construction.



The newly published figure will surely put pressure on the Reserve Bank of Australia (RBA) which has previously begun slowing down the increase in interest rates.


In addition, investors lowered expectations for the RBA to raise its interest rate by 25 basic points at a policy meeting scheduled for February 7.


Meanwhile, the Aussie dollar threw to the top 5 months compared to the US dollar to trade around 0.7100 at the Asian session.


In New Zealand, the warmth of inflation pressure decreased with CPI recorded a 1.4% increase in the fourth quarter of 2.2%.


This caused the kiwi dollar trading to decline around 0.6476 compared to the greenback as soon as the data was published.