Australian dollar goes under US 80 cents for first time since 2009

The Australian dollar went under US 80 cents this morning
for the first time in five-and-a-half years.

AAP reports that the dollar fell as low as US 79.96 cents
this morning and was trading at US 80.05 cents at 8:30 am, following the
announcement of a 60 billion Euro per month stimulus package announced by the
European Central Bank.

The dollar had weakened on Wednesday from US 82.13 to 80.81, reported Fairfax, following a surprise cut in the Canadian interest rate by the
Bank of Canada and a drop in that country’s currency.

“The BoC decision has relevant parallels to Australia –
namely, a commodity-centric economy with growth slightly below-trend and an
inflation pulse that is providing space for some additional easing,”
Daniel Been, senior currency strategist at ANZ Bank, told Fairfax at the time.

There
were predictions the Australian dollar would head under US 80 cents following
the announcement of quantitative easing by the European Central Bank to deal
with the region’s weak economy.

European
growth is under one per cent and unemployment is at 11.5 per cent.

The bond
buying program was worth 60 billion Euro a month until the end of September
next year, the ECB’s president Mario Draghi said. This was slightly larger than
the 50 billion Euro a month predicted ahead of Draghi’s announcement, according to AAP.

Image: Glenn Hunt/Fairfax