Manufacturing News

Dollar plummets to 90 cents this morning

Australian dollar hit a six month low this morning, only narrowly staying above
$US 90c, with slowing Chinese factory output and the US dollar’s increased
strength two major reasons for the slide.

Business Spectator reports that the dollar fell to $US 90.14c at 7:15 am this morning.

It notes
that consumer confidence and retail figures in the US are increasing the likelihood
that US interest rates will rise shortly.

Over the
weekend, figures were released showing
Chinese factory output rose only 6.9 per cent, year-on-year – far below a
predicted 8.8 per cent.

“Short of outright policy easing,
China will likely miss the 7.5 per cent growth target this year, and a sharp
economic slowdown will also endanger the undergoing structural reforms,” Fairfax reports the ANZ’s chief China economist Li-Gang Liu as saying

Lower Chinese demand has helped lower prices for iron ore and other
commodities. Last week the price for iron ore, Australia’s leading export, hit
a five-year low.

Bank of America Merrill Lynch predicts the Australian dollar will
be the worst performing currency among developing nations, and is tipped to be
worth about $US 80c at the end of next year, Business Spectator notes.


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