Uncertainty clouding currency
Sydney – Arabstoday
The Australian dollar slipped below parity with the greenback for the first time in 12 months on Saturday on fears that the mining-powered economy was slowing.
The Aussie hit a low of 99.62 US cents in
offshore trade overnight, dipping below the US$1 mark for the first time since May 14 last year, when it was rattled by political turmoil in Greece.
It had rebounded to US$1.0024 by Saturday morning, but analysts said the currency's robust run may have peaked as Australia's historic boom in mining investment plateaus and uncertainty clouds its economic transition.
"It looks to be something a bit more permanent," said Stephen Koukoulas from Market Economics.
"The last few weeks we've gone from about US$1.05 to about US$1.02... it has been just coming off the boil a little bit the last month or so."
"I reckon there's a bit of a repositioning going on, there's a sense that maybe some of the best is behind the Aussie dollar. The fresh buying might be starting to dry up."
The Reserve Bank of Australia slashed interest rates to a record low of 2.75 percent this week in a bid to stimulate Australia's non-mining economy, citing sluggish growth and employment and the protracted strength of the dollar.
It expects Australia's economy to expand at below-average pace this year, with growth of 2.5 percent and inflation of 2.25 percent. The government will release its updated economic forecasts on May 14.