* 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 (Reuters) - 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 April.
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 Navaratnam)