The Australian dollar hit a five-and-a-half-year
low this morning and was trading at US 77.85 cents at 10:30 am.
The Australian Financial Review reports that positive US jobs data strengthened the country’s currency.
Elsewhere it was reported that US jobless claims were down 43,000 for the week ending January 24 to 265,000, the strongest
result since 2000.
The dollar went as low as US 77.22
in early Asian trade this morning.
The strength of the US dollar has
made a difference to the Aussie, but commodity prices were playing a bigger
role, the Commonwealth Bank’s Richard Grace told the ABC.
Economists are split 50/50 on
whether or not the Reserve Bank of Australia will lower interest rates when it
meets on Tuesday, notes The Sydney Morning Herald.
However, an opinion column by News
Corp’s Terry McCrann stating that the RBA was likely to cut rates has helped push the dollar downwards this week.
The dollar has dropped by 18 per
cent in just six months, the sharpest drop since the GFC.
The National Australia Bank’s market
strategy director Gavin Friend predicted that the volatility seen in recent weeks would continue.
“It will be US78¢ at year end and
then US75¢ by 2016 but it won’t be a smooth glide there,” he said.
“The dollar will be whipping around
in this two-year period.”