Dollar drops overnight


money, business, chart, The Australian dollar has plummeted to fresh four and a half year lows after the head of the Reserve Bank said he wanted the currency to fall to 75 US cents.

At 0700 AEDT on Friday, the local currency was trading at 82.55 US cents, down from 83.29 cents on Thursday.

The Australian dollar fell as low as 82.15 US cents overnight, its lowest point since June 2010, after RBA head, Glenn Stevens, said the currency needed to get down to 75 US cents.

“A year ago, I said probably 85 US cents was better than 95 and if I had to pick a figure now, I would say probably 75 is better than 85,” Stevens told Fairfax.

National Australia Bank senior economist David de Garis, said Stevens’ comments left the Australian dollar/US dollar bleeding lower.

“Glenn Stevens did a major interview… trying to give the Australian dollar another kick lower,” de Garis said.

“(He was) not pushing along the immediate prospect of rate cuts. But not ruling them out either.”

Stevens said the economy was tracking largely as the central bank had expected, despite disappointing September quarter economic growth figures which shocked the market last week.

He acknowledged further cash rate cuts would still have a stimulatory effect on the economy but said he believed interest rate stability was supporting confidence.


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