The Australian dollar is trading lower today after GDP numbers out of the US on Friday came in above analysts’ expectations and a bullish tone by US Fed president Janet Yellen.
AT 10.09am (GMT) the Aussie dollar was trading at US78.20c down from a high of US79.20c on Friday.
Consumer prices in the US rose for a third straight month in April while the core consumer price index rose 0.3% marking the biggest jump since January 2013.
The unexpected jump in data has once again put an interest rate hike on the table from the US Federal Reserve, which may now act sooner rather than later,
"The 0.3 per cent month-on-month increase in core consumer prices in April, which pushed the three-month annualized rate of core inflation up to a four-year high of 2.6 per cent, leaves the Fed with less scope to delay raising interest rates," Capital Economics said in a note.
"Admittedly, the annual core inflation rate remained at 1.8 per cent, but the upward trend in the monthly increases since January is pretty clear now."
Also on Friday, Fed president Janet Yellen noted On Friday that the US central bank is on track to raise rates this year although they would proceed with caution,
“I think it will be appropriate at some point this year to take the initial step to raise the federal-funds rate target and begin the process of normalizing monetary policy,” Ms Yellen said in a speech.
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