Australian dollar hits fresh low

By a staff reporter, with AAP

The Australian dollar has continued its decline, hitting its lowest level since June 4, 2012. 

At 0628 AEST Saturday morning, the local currency was trading at 97.39 US cents, having recovered slightly from the 97.28 US cents it was trading at earlier in the session.

The slight recovery also saw the dollar return to the 97.37 US cents it reached at 1700 AEST Friday.

The Australian dollar has solidified its position under parity versus the United States dollar amid concerns of China's economic outlook, a response to the federal budget and renewed strength from the US dollar.

ANZ foreign exchange strategist Andrew Salter said traders dumped the currency after it pushed below 98 US cents around noon on Friday.

Mr Salter said there were no signs the sell-off in the Australian dollar would end any time soon and expects it to fall to around 95 US cents.

"It would be a brave strategist to predict an end to it (the sell-off) at the moment," he said.

"The momentum is all downwards at the moment."

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In the past 97 cents has been a serious support line for AUD. I can't help but think it can only bounce from here. I think people are getting way to excited about the feds prospects of winding back stimulus and probably now way to excited about RBA interest rate cuts. There will be no rate cuts on the table now - not after the dollar has fallen 8 cents in a month. Those shorts have over-shorted. I don't believe the China growth story has ended either.
i am interested to see where all this ends up, with the reserve bank saying they want to devalue the currency and the structural problems with the budget, the AUD is likely to continue it's fall, especially since everyone was saying it was so over-valued before. I just haven't heard any commentary on how this will affect oil and other imports and how it is going to affect cost of living, as everyone knows, when you have to spend more on goods and services, this pushes up inflation, also can most people afford to pay more?
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Given that the big slide commenced on the day the Reserve cut rates, then our supposed healthy economy isn't in the loop. More to the point, when chaps like Soro's play the money market - It is that market, setting the relative values of Australia's currency. Indeed, has been all along, in spite of Wayne Swan's mantras. Look out for 90c, or sub thereof, one might suggest. On the flip side, perhaps this might be a golden opportunity for the Canberra rabble to see what sort of (in practice) reversals they can apply to the off-shoring of local industry. None, probably, since they have failed to grasp that most Germans and Swiss are far better paid than we are, yet their countries still prosper. Mind you, neither have ever focused on rock sales for a living
There's a direct correlation with the iron ore price/ton in USD and the AUD exchange rate. Iron ore's fallen to below USD137/ton and in addition the USD has been boosted by possibility of QE being curtailed later this year. Added to these real trade flows are speculative positions with predictions of AUD going down to 80c in due course. A safer bet may be 90c by mid june, aided and abetted by further weakness in commodities. All good news for OZ exports and countering cheap import substitution.Just the boost that the non resource sectors have been crying out for.