The Australian dollar is down sharply in today’s trading session after weaker than expected inflation data heightened chances of a rate hike by the RBA in the nearest future.

At 5.26pm(GMT) the Aussie dollar was trading at US74.55c down from US75.50c in yesterday’s trading.

Data released from the Statistics office earlier today showedAustralia’s headline at 0.5 percent in the first quarter of the year while the yearly figure hit the market at 2.1%.

The figures were less than the  0.6percent and 2.2percent that analysts had been expecting.Although the numbers are within the RBA’s target range of 2-3 percent they are at the lower end which has raised speculation that the central bank may have to cut rates further in order to boost CPI,

Softer AU CPI adds to softer commodity export prices and weighs on AUD, limiting any rebounds. RBA policy remaining on hold for a prolonged period is also underscored by low core inflation,” noted analysts from Westpac.

 Riskier currencies like The Aussie dollar were also hurt by US President Donald Trumps decision to place tariffs on Canadian lumber entering the US

With investors left worrying what moves might come next from the US President.

“That being the case, who’s next, what countries and what products might be next. And so pretty much all the commodity currencies, New Zealand and the South American ones included got hurt overnight,” noted Westpac senior market strategist Imre Speizer.