Australian dollar falls to three-year low

The Australian dollar fell to its lowest point in more than three years this morning, as the US Federal Reserve announced that it would trim its monthly stimulus spending by $US 10 billion a month.

The dollar went as low as 88.19 cents, then recovered to be about 88.61 cents at 8:30 am, Fairfax reports.

The US Federal Reserve has been spending $US 85 billion a month stimulating the economy, which is suffering its worst conditions since the Great Depression. This will be wound down to $US 75 billion a month due to signs of improvement.

“Today’s policy actions reflect the committee’s assessment that the economy is continuing to make progress, but it also has much farther to travel before conditions can be judged normal,” The ABC reports Reserve chairman Ben Bernanke as saying.