PERTH: The Australian dollar briefly fell below US79c as worries about the New Zealand economy and Greece’s next repayment weighs on market confidence.
The Australian dollar was worth US79.01c at 12.00pm (AEST) on Monday, down from US79.11c on Friday.
During the morning it fell as low as US78.94c and traded as high as US79.34c.
Over the weekend, The People’s Bank of China announced it would cut its key interest rate by a quarter of a percentage point.
Westpac chief currency strategist Robert Rennie said ordinarily that would be supportive for the Chinese and Australian economies and therefore good news for the Australian dollar.
However he said other factors are proving a drag on the Australian dollar such as a possible rate cut by the Reserve Bank of New Zealand.
“Weakness in the kiwi dollar and concerns about Greece and Europe seems to have gotten the market off to a pretty poor start,” he said.
“There is increased focus on Europe with a eurogroup meeting later today, and Greece’s IMF repayment which needs to be made by tomorrow.”
Mr Rennie said trade in the Australian dollar is likely to be cautious ahead of the release of the federal budget on Tuesday evening.
