CANBERRA: 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. 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. “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.”
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.
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.
“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.”
