By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) -- The dollar gained against its Australian counterpart in Asian trading Wednesday, after Australian inflation data came in slightly below expectations.
The consumer price index data led investors to pare bets that the Reserve Bank of Australia will decide on a hefty interest-rate hike next week. See full story on Australian price data.
The Australian dollar slipped about 0.8% to 90.82 U.S. cents, as investors factored in the potential smaller rate move. Higher interest rates boost the return of investments denominated in a country's currency.
"With RBA rate hike now most likely limited to 25 basis points the pair could drift lower to test the .9000 level if risk aversion flows continue to dominate trade for the rest of the week," said Boris Schlossberg, director of currency research at GFT.
But the U.S. dollar slipped against other major rivals, trading at 91.18 yen, down from 91.90 Japanese yen in late North American trading on Tuesday. The euro bought $1.4811, up from $1.4786.
