Strain on dipping dollar
THE Australian dollar has lost a quarter of its value in the past two years, which begs the question: How low will it go?
The currency has been hitting a sixyear low of below 73¢ US in recent days, after being above $ US1 in May 2013.
Plummeting prices for Australia’s mining exports, a weaker outlook for the Chinese economy, expectations of a looming interest rate hike in the US and turmoil on the Chinese stock market in the past few weeks have all been a downer for the little Aussie battler.
While most analysts were saying the Aussie dollar wouldn’t fall much further, LTG GoldRock director Andrew Barnett was more pessimistic, and predicted it would be 63¢ US by the middle of next year.
“I think it’s under a lot of pressure at the moment with plummeting Chinese stock markets and commodity prices and the volatility we’ve seen is not helping our local market and it’s not helping the Aussie,” he said.
Mr Barnett found it strange that most analysts weren’t predicting a fall below 70¢ US by the end of the year.
“I think most of them are being optimistic and cautious,” he said.