Dollar hits three week low

 

moneyThe Australian dollar fell to a three week low, coming under pressure from weaker iron ore prices and concerns about the Chinese economy.

At 0700 AEST on Wednesday, the local unit was trading at 92.42 US cents, down from 92.71 US cents on Tuesday.

The currency fell as low as 93.41 US cents on Wednesday morning, its weakest level since May 2.

BK Asset Management managing director Boris Schlossberg expects the currency to fall further in the coming days.

“The sentiment is the Aussie has clearly turned negative over the past few days, especially as iron ore prices declined below $US100 a tonne,” he said.

“To add salt to a wound, China’s vice finance minister said that global economic recovery was “extremely slow” suggesting that Chinese demand was not going to pick up any time soon.”

Mr Schlossberg said the Australian dollar could fall as low as 92.00 US cents as the chance of an interest rate cut by the Reserve Bank becomes more likely if the economy shows signs of weakening.

Local economic data out on Wednesday include Westpac’s consumer sentiment survey and the wage price index for the March quarter from the Australian Bureau of Statistics.

AAP

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