SYDNEY: The Australian dollar has plunged a new four-year low in midday trading, leaving it well on the system to testing biggest support from the May, 2010 low of US80.67c.
At 4pm (AEDT), the local unit was trading at US82.79c, down almost US1c from US83.76c on Friday.
China’s weaker than expected monthly imports and exports data today added to downwards pressure from narrowing interest rates differentials with the US.
With strong US jobs data boosting expectations of US interest rate hikes next year, and last week’s weak domestic GDP data fuelling expectations of domestic interest rate cuts, the spread between Aussie and US 10-year bond yields has hit an eight-year low of 75 basis points.
Earlier in the day the Aussie fell below the US83c mark after a report released at the end of last week showed the US economy created 321,000 new jobs in November, the highest monthly growth rate in nearly three years.
The Aussie dollar enjoyed a small bounce late in morning after an ANZ survey showed that the number of job advertisements rose for the sixth consecutive month, but the unit soon fell back again.
Employment ads on the internet and in newspapers were up 0.7 per cent in November and had gained 8.9 per cent in the 12 months to November.
“The US labour data on Friday was a big, big surprise and the Australian dollar dropped quite significantly along with other currencies and what we’re seeing is a little bit of consolidation
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