* Aussie falls on lower-than-expected CPI data
* Limited reaction to China HSBC flash manufacturing PMI
* Moves in other major currencies subdued
(Updates prices, adds comments)
By Masayuki Kitano
SINGAPORE, April 23 The Australian dollar slid
on Wednesday after data showed that Australian consumer prices
rose less than expected in the first quarter, lessening the risk
of a rise in domestic interest rates this year.
Other major currencies were subdued, with the euro edging up
0.1 percent to around $1.3817, while the dollar eased 0.1
percent to 102.55 yen.
A survey on China manufacturing activity, which largely met
expectations, had a muted impact across currency markets.
The HSBC/Markit flash Purchasing Managers Index (PMI) for
April rose to 48.3 from March's final reading of 48.0, still
below the 50 line separating expansion from contraction, but
indicated some stabilization in a slowing economy.
The standout mover was the Aussie, which fell after data
showed that Australian consumer prices rose by a surprisingly
low 0.6 percent last quarter, while key measures of underlying
inflation increased by less than expected.
The currency tumbled 0.9 percent to $0.9286,
pulling away from a five-month high of $0.9461 set earlier in
There might be more downside risk for the Aussie dollar in
the very short term, despite talk of bids for the Aussie from
levels around $0.9250, said Hiroshi Maeba, head of FX trading
Japan for UBS in Tokyo.
"While there are some bids, I think there are also some
stops below them as well," Maeba said, adding that he expected
the Aussie to attract buyers on the downside, helped by its
relatively high interest rates.
Market participants said the Aussie's drop was likely
exacerbated after it had been bought the previous day as
investors positioned for a stronger inflation print.
The CPI reading reinforces the case for the Reserve Bank of
Australia to keep interest rates steady for a while, said Divya
Devesh, FX strategist for Standard Chartered Bank in Singapore.
"They are clearly more concerned about growth rather than
inflation at the moment... If anything this gives them the space
to remain on hold for a longer period of time," Devesh said.
In the dollar and euro, trading ranges remained narrow and
lacked conviction. The dollar index last stood at 79.839,
down 0.1 percent.
The euro has been hamstrung recently by uncertainty over
whether the European Central Bank will deliver more monetary
stimulus in the near term.
European Central Bank President Mario Draghi recently made
clear the euro's strength is a possible trigger for the central
bank to ease monetary policy. He is scheduled to give a speech
in Amsterdam on Thursday.
(Additional reporting by Ian Chua in Sydney; Editing by Shri