The Australian dollar has fallen to a fresh low below US90c after the US dollar strengthened in the wake of the Federal Reserve delivering on expectations to taper its asset purchase program but defying bets that it would drop a pledge to keep interest ...
Analysts are scrambling to reassess where they see fair value for the Australian dollar after its recent week-long tumble, just as internal modelling by the Reserve Bank suggests that the local currency is still overvalued.
Should China's economy faulter, the Australian dollar and economy will be in the firing line. Australia's most valuable commodity, iron ore, has plunged close to 40 per cent this year as supply has began to outweigh Chinese demand.
Australian dollar bulls have been hit by a double whammy. Just as Australia's biggest trading partner - China - seems to be slipping back into an economic funk, the US dollar has embarked on a long-awaited rally.
The Bond Vigilantes team from UK-based M&G Investments said that the deterioration Australia's terms of trade - or what the world pays for the country's exports compared to what Australia pays for imports - means the Aussie could fall another 15%.
Australian struggles seem to have compounded on Tuesday after the Reserve Bank of Australia released the minutes from the most recent monetary policy meeting, in which they indicated that their focus will be on house prices.