Australia February inflation holds at two-year low of 3.4%

A customer looks at products marked with discounted prices on display at a chemist in a shopping mall in central Sydney, Australia, July 25, 2018. REUTERS/David Gray/File photo

SYDNEY — Australian consumer price inflation held at a two-year low in February, contrary to expectations for a slight uptick, a result reinforcing market wagers that the next move in interest rates would be down.

Data from the Australian Bureau of Statistics on Wednesday showed its monthly consumer price index (CPI) rose at an annual pace of 3.4 percent in February, unchanged from January and under forecasts of 3.5 percent.

READ: Australia’s central bank holds rates, waters down tightening bias

A closely watched measure of core inflation, the trimmed mean, rose an annual 3.9 percent, up slightly from 3.8 percent in January.

The CPI excluding volatile items and holiday travel, however, ticked down to 3.9 percent, from 4.1 percent.