CANBERRA: The Australian dollar has fallen to a five year low, reaching 80.5 US cents this morning.Most analysts expect it will slip even further, with some predicting it could drop another 10 cents against the US dollar, colloquially known as the greenback.Comsec’s Craig James says while there is a lot of up and down movement, the trend is generally downward against the greenback.
It is the US dollar that is being the driving force and it is not against just the Aussie dollar, it is the euro and the Japanese yen,” he said.You have annualised growth of about five per cent compared to our three per cent, and they are preparing over there to lift interest rates which will narrow the gap between our interest rates.
Clearly the investors around the world believe the best place to put your money at the moment is in the stronger greenback.”
Mr James agrees the Australian dollar could fall another 10 cents against the greenback.The Reserve Bank of Australia would hope that it would fall further from here, the RBA Governor has said for a long time that the Australian dollar should not be perched up around the 85 cent mark, it should be about the 75 cent mark or the late 70’s.” he said.It is our expectation, that the dollar will fall further to around that 75 cent mark or even further.”Mr James says the lower dollar is good for a whole range of businesses, whether you are an exporter, retailer or a manufacturer, you tend to like the dollar at a lower level.
