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Why would the inflation rate being lower

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According to an article in the Wall Street Journal in 2014, "The Australian dollar tumbled after muted inflation data scotched investors' expectations that the central bank would raise interest raises."

a) Why would the inflation rate being lower than expected make it less likely that the Australian central bank would raise interest rates?

b) Why would the fact that it was less likely that the Australian central bank was going to raise interest rates cause the value of the Australian dollar to fall?

Reference no: EM132586743

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