August 22, 2008
August 22, 2008 - The Australian dollar has continued to fall against the U.S. currency, meaning good news for Australian farmers and mining companies. The currency has hit a seven-month low of U.S. 88.1 cents after the U.S. dollar rose and the price of oil dropped.
The dollar has also been affected by expectations the Reserve Bank will cut interest rates.
A senior dealer at IG Markets, Rob Wallis, says the falling dollar will give commodity producers a boost.
"It's great news for exporters, obviously they can sell their products in U.S. dollars a lot lower than they have previously been able to over the past few months, particularly the big companies like BHP and Rio, in terms of the amount of Australian dollars they will receive for the commodities they are selling," said Wallis.
The Commonwealth Bank's Richard Grace, says the Australian dollar has fallen more than 10 percent since it reached a 25-year high last month.
"There's also some downward pressure on commodity prices today, which is adding extra weight on the Australian dollar, and commodity prices are adjusting down because the growth estimates for the global economy have also been revised down," he said. "So, the two are going in tandem, and that's weighing on the Australian dollar." Reprinted in part from ABC Rural Australia