Aussie sinks on soft inflation, dollar near 22-month high on strong US data

The Australian dollar tumbled to a six-week low on Wednesday as soft domestic inflation reinforced prospects of monetary easing, while the U.S. dollar hovered near a 22-month high against its peers on after strong U.S.housing data further eased concerns towards the world’s biggest economy. The Aussie was down 0.9 percent at $0.7040 after brushing $0.7031, its lowest since March 11. The antipodean currency tumbled after data on Wednesday showed Australia’sheadline consumer price index (CPI) come in flat in the January-March quarter, below forecasts for an 0.2 percent increase and the lowest since early 2016. The Reserve Bank of Australia (RBA) has recently opened the door towards monetary policy easing, and Wednesday’s weak inflation reading increased views that the central bank would cut the key interest rate from an already record low of 1.5 percent.