Australian Dollar Drops 1% on Softer Third-Quarter Inflation

Marcus Jacob
28 Oct, 2015
New York City

Australian dollar declined 1% after the third-quarter inflation slowed to 0.5% from the second-quarter and annual inflation rate was 1.5%. Core inflation that excludes volatile food and energy prices also was lower than expected knocking all hopes of a rate hike in the near term.

[R]5:30 PM Sydney, Australia – Australian dollar declined 1% after the third-quarter inflation slowed to 0.5% from the second-quarter and annual inflation rate was 1.5%. Core inflation that excludes volatile food and energy prices also was lower than expected knocking all hopes of a rate hike in the near term.[/R]

Australian market indexes eased and the Aussie dollar plunged 1% after the inflation slowed in the third-quarter.

Consumer price index in the third-quarter increased 1.5% from a year ago and the index increase slowed to an increase of 0.5% from the June quarter growth of 0.7%, the Australian Bureau of Statistics reported.

Australian dollar declined 1% to 71.19 U.S. cents and in stock trading turnover rose to 693 million shares worth $4.8 billion.

At close, the ASX 200 Index decreased 11 or 0.2% to 5,335.20 and the broader All Ordinaries Index fell 10.20 to 5,374.40.

In commodities trading, gold added US$3 to US$1,168 an ounce and Brent crude future for immediate month delivery slid 16 cents to US$46.65 a barrel.

Australian Stock Movers

Amcor Limited advanced 1.2% to $13.56 after the packing company agreed to acquire the U.S.-based Encon Inc’s Ohio-based preform manufacturing unit Dayton for $76.44 million or US$55 million to expand the rigid plastics business in the U.S.

Dick Smith Holdings Ltd tumbled 33.9% to 84 cents after the consumer electronics retailer said sales in the first-quarter ending in September rose 6.9% and comparable sales in the quarter increased 1.3% from a year ago period.

The retailer lowered its net profit forecast for the year between $5 million and $8 million from the earlier estimated range of $ $45 million to $48 million.

National Australia Bank Ltd slumped 2.2% to $31.72 after the financial services provider reported net interest income in the year ending in September was flat from a year ago to $30.42 billion.

Net profit in the year soared 19.6% to $6.34 billion compared to $5.30 billion and diluted earnings per share jumped to 245.4 cents from 215.4 cents.

The bank sold its majority stake in unprofitable underperforming life insurance business of U.K. subsidiary.

Senex Energy Ltd declined 5% to 19 cents after the oil and gas explorer revenues in the first-quarter ending in September plunged 20% to $18.8 million mainly due to lower sales volumes and a lower average realised oil price.

""We have $100 million in cash and no debt,"" the chief executive, Ian Davies managing director of Senex said.

Transfield Services Limited dropped 1.9% to $1.01 after the maintenance and construction services provider secured a contract to run the Nauru and Manus Island offshore detention centres for additional four months with the Department of Immigration and Border Protection.