SYDNEY, April 28 Reuters The Australian dollar slipped on Wednesday after surprisingly soft inflation data argued for super loose policy for years to come, though surging commodity prices helped limit losses.
The Aussie fell 0.3 to 0.7740 and away from resistance at 0.7815. Support comes in around 0.7735 and 0.7695.
The New Zealand dollar followed with a dip to 0.7195 , having failed to sustain a fiveweek top of 0.7243 touched on Monday. Support lies around 0.715060.
Australian consumer prices rose just 0.6 in the first quarter, when analysts had looked for 0.9.
Even more startling was a slowdown in a key trimmed mean measure of inflation to a record low of 1.1, far away from the Reserve Bank of Australias RBA target band of 23.
Given core inflation has run below 2 for more than five years, it would need to run above 3 for some years to average out at the midrange target of 2.5. Bottom line the Reserve Bank will maintain its resolve and keep the cash rate at record lows until 2024, said Craig James, chief economist at CommSec.
The market reacted by pulling 10year bond yields down 4 basis points to 1.69, shrinking the spread over U.S. Treasuries to 7 basis points.
There is still spare capacity in the job market, so there is no sign as yet of generalised wage pressures, James added. The RBA doesnt expect wage pressures to emerge until the jobless rate is closer to 4 clearly still some way off.
The unemployment rate was last at 5.6 in March.
One area where there…