SYDNEY, May 13 Reuters The Australian and New Zealand dollars sank to oneweek lows on Thursday against their U.S. counterpart, which was buoyed by expectations of earlierthanexpected policy tightening by the Federal Reserve in response to rapid inflation.
U.S. consumer prices increased by the most in nearly 12 years in April as booming demand amid a reopening economy pushed against supply constraints, data showed on Wednesday.
Traders now await U.S. weekly jobless claims data due later in the day and retail sales numbers on Friday to determine whether consumer prices will continue to rise.
The Australian dollar, a liquid gauge of risk, was last at 0.7727, after touching its lowest level since May 6 of 0.7718 earlier in the session. It had slid 1.5 on Wednesday when the U.S. inflation data was released.
In Australia, inflation is expected to stay under the central banks 23 target band for a long time to come, despite solid economic recovery.
The Reserve Bank of Australia RBA, last week, emphasised the economy was well short of full employment and wage growth is just too slow. Annual wages growth in Australia is at a record low of 1.25, compared with 2 for Europe and nearly 3 in the U.S.
The RBA has said it would not increase the cash rate from the current record low of 0.1 until inflation was sustainably within its target band.
The New Zealand dollar hit a oneweek trough of 0.7152 before nudging up a bit to 0.7171.
The kiwi was supported by hopes that the country…