Perth, Australia – February 28, 2025 – Parker Blackwood Advisers discuss the recent depreciation of the Australian dollar following lower-than-expected January CPI data.
The Australian Bureau of Statistics states that the annual headline inflation rate is steady at 2.5%, projection at 2.6% was denied by the markets. Core inflation excluding the frequency of items and holiday travel increased from 2.7% in December to 2.9%. Following this news, the Australian dollar fell 0.37%, trading at 0.6320 against the U.S. dollar.
Parker Blackwood Advisers CEO Leigh Jamieson gave more insight into the currency movement:
“The softer-than-expected inflation figures have exerted downward pressure on the Australian dollar. This development suggests that the Reserve Bank of Australia made a timely decision to lower the cash rate to 4.10%, with a view to supporting economic growth in the context of subdued inflation.”
The CPI data indicate that while headline inflation is stable, underlying price pressures remain. Some prominent contributors to annual inflation include food and non-alcoholic beverages (+3.3%), housing (+2.1%), and alcohol and tobacco (+6.4%). By contrast, electricity prices saw a big decline of 11.5% during the same period.
Jamieson added:
“The drop in electricity prices brings some relief to consumers; however, the broad-based increases in core inflation components are a clear reminder that vigilance is required moving forward on monetary policy. These are dynamics that investors must consider as they navigate their way through the current economic landscape.”
These developments are closely monitored by Parker Blackwood Advisers, which continues to offer informed advice to its clients about rapidly changing market conditions.
For more information or personalized advice in relation to personal financial matters, please contact Parker Blackwood Advisers at info@pb-investment.com
