Dollar drops as RBA cuts tipped

THE Reserve Bank has revised down its economic forecasts as expected, sending the Australian dollar plunging after surprise at the size of the revisions.

The dollar, already down about 2.5 per cent this month against the US dollar, dropped more than US0.3c after the RBA substantially cut its inflation and GDP forecasts.

The dollar, which was worth US72.95c on January 31, slipped from US70.99c to as low as US70.61c, but closed at US70.77c.