Dollar sinks lower

 

coins, markets, dollar, money, stocksThe Australian dollar is almost one US cent lower as concerns grow about slower global economic growth.

At 0700 AEDT on Friday, the local unit was trading at 87.76 US cents, down from 88.68 cents on Thursday.

Germany’s leading economic institutes say Europe’s largest economy would grow by just 1.3 per cent in 2014, much lower than the 1.9 per cent growth they had previously expected.

The forecast comes a day after the minutes of the US Federal Reserve’s September meeting showed there were concerns about weak growth overseas.

OM Financial senior client adviser, Stuart Ive, said market sentiment turned sour after the German forecasts added to fears about the global economy.

“It’s been enough to hit the equity markets with the Dow Jones Index down 1.97 per cent,” he said.

“You’re getting flight to safety, in which traders are buying US dollars, and now we’re seeing the Australian dollar pushed back lower.”

Ive said that while the US economy’s recovery is strengthening, the Chinese and European economies are slowing down.

“Clearly, the Fed has concerns about the global growth situation,” he said.

Local markets on Friday will focus on the release of official housing finance figures for September.

AAP

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