The Australian dollar dropped today versus the euro and fluctuated against the US currency on the speculation that China will increase its interest rates to rein the rapid growth of the economy.

The inflation, that grew 5.4 percent in March, may encourage China to increase the reserve for banks as early as today. China’s economy expanded 9.7 percent last quarter, compared to the average forecast of 9.4 percent. The MSCI Asia Pacific Index of shares slipped 0.6 percent.

AUD/JPY fell from 88.00 to 87.67 today as of 14:04 GMT after reaching the intraday low of 87.21. AUD/USD traded at 1.0549, following the decline from 1.0542 to 1.0510.

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