Oz dollar slips to 10-year low

THE Aussie dollar yesterday sank to its lowest level against its US counterpart in a decade.

The Australian sharemarket also finished lower, after the US Federal Reserve said its interest rate cut was unlikely to be the first of many.

The Australian dollar was buying just US68.45c yesterday, down from US68.93c a day earlier after the greenback rallied.

Apart from a January 3 flash-crash that lasted just minutes, the last time our dollar bought less than US68.50c was in the depths of the global financial crisis in early 2009.

The US Federal Reserve cut interest rates by 25 basis points yesterday, but Fed chairman, Jerome Powell warned it wasn’t “the beginning of a long series of rate cuts,” surprising many traders.

“There was a little bit of disappointment, given the confusion on Jerome Powell’s press conference,” said Bell Direct equities analyst Julia Lee.

“He wasn’t as aggressive as markets were anticipating.”

US markets lost more than a percentage point on the news.

On the Australian share market, the benchmark S&P/ ASX200 index closed down 23.7 points, or 0.35 per cent, to 6788.9. The broader All Ordinaries was down 24.8 points, or 0.36 per cent, at 6871.9.

Most sectors were lower, except property trusts, industrials and consumer discretionary shares.

The mining sector was the biggest loser, down 1.5 per cent. BHP fell 1.2 per cent to $40.26, Fortescue Metals was down 2.3 per cent to $8.14 and South32 was down 1.3 per cent to $3.10.

Rio Tinto was down 1.1 per cent to $97.71 and after the markets closed, it announced it would pay $US3.5 billion ($A5.1 billion) in normal and special dividends to shareholders.

Gold prices dropped 1.3 per cent to $US1406 on Mr Powell’s comments.