Consumer prices fall for first time since 2008; chances of May 3 rate cut rise

Consumer prices have fallen for the first time since December 2008, with deflation of 0.2 per cent in the March quarter.

The Bureau of Statistics data show inflation was just 1.3 per cent over the past year.

Money market bets on a May 3 Reserve Bank rate cut surged from 11 percent to more than 50 percent after the inflation result hit. The Australian dollar dived a full US cent to be as low as 76.49 US cents.

Listen to my report and analysis on The World Today shortly after the data hit

A$ dives full US cent as low as 76.79 US cents after CPI release    Source: Bloomberg