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Australian dollar falls to new six-year low amid economic turbulence | |
(about 2 hours later) | |
Ongoing global economic worries have pushed the Australian dollar to a fresh six-year low. | Ongoing global economic worries have pushed the Australian dollar to a fresh six-year low. |
The Aussie is currently buying 69.11 US cents after more selling overnight in the wake of jobs figures from America which showed unemployment had fallen further than expected. | The Aussie is currently buying 69.11 US cents after more selling overnight in the wake of jobs figures from America which showed unemployment had fallen further than expected. |
Related: US economy adds 173,000 jobs as unemployment rate drops to 5.1% | Related: US economy adds 173,000 jobs as unemployment rate drops to 5.1% |
But the chances of the US Federal Reserve raising interest rates were complicated by figures which showed the US economy created fewer jobs than expected in August. | But the chances of the US Federal Reserve raising interest rates were complicated by figures which showed the US economy created fewer jobs than expected in August. |
The Australian dollar is likely to remain under pressure in the coming weeks. | The Australian dollar is likely to remain under pressure in the coming weeks. |
“It’s the same reason as what we’ve seen recently,” Commonwealth Bank chief currency strategist Richard Grace said. | “It’s the same reason as what we’ve seen recently,” Commonwealth Bank chief currency strategist Richard Grace said. |
“Lower commodities prices, speculation of slower global growth led by China, lower Australian bond yields, narrowing interest rate differentials, a weaker Asian stock market – all of those factors have contributed.” | “Lower commodities prices, speculation of slower global growth led by China, lower Australian bond yields, narrowing interest rate differentials, a weaker Asian stock market – all of those factors have contributed.” |
The European Central Bank on Thursday downgraded its economic forecasts and inflation forecasts, and hinted at more stimulus if needed. | The European Central Bank on Thursday downgraded its economic forecasts and inflation forecasts, and hinted at more stimulus if needed. |
The currency had twice dipped below 70 US cents earlier in the week, first due to weak Chinese economic data and then a disappointing rate of Australian economic growth. | The currency had twice dipped below 70 US cents earlier in the week, first due to weak Chinese economic data and then a disappointing rate of Australian economic growth. |
Brent crude, the global benchmark for oil, fell overnight on Friday by $1.07 to settle at $49.61 a barrel. US crude was down 70c to $46.05. | |
“Oil is only the beginning of this story,” Ian Bremmer, president of Eurasia Group, noted. | |
Related: The Australian dollar is 'smashed' and teetering over the US70c precipice | |
“In fact, the value that producers of oil, gas, metals, minerals and other commodities have lost just in the past year comes to about $2 trillion, the size of India’s entire economy,” he said. | |
“China by itself accounted for about 17% of the world’s overall GDP in 2014, but its demand for imports has already fallen 14.6% over the first seven months of 2015.” |
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