Australian consumer prices rose only modestly last quarter but a surprisingly high reading for a key gauge of underlying inflation was enough to dent market speculation of future rate cuts and lift the local dollar.
The main offender was the trimmed mean measure of prices which jumped 0.8 percent in the quarter and 2.9 percent for the year, above analysts forecasts of 2.7 percent.
That could pose a challenge to the Reserve Bank of Australia's (RBA) confidence that inflation would stay comfortably within its long-term target band of 2 to 3 percent.
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