Australian Dollar dives to lowest since 2009

The Australian dollar dived to its lowest in seven years on Friday. At 1200 AEDT on Monday, the dollar traded at 68.69 US cents, recovering slightly from its last trading price of 69.54 cents on Friday.

The Aussie dipped to 68.29 US cents on Friday night, its lowest since March 2009, amid disappointing global share markets and slumping oil prices. It is now over 6 percent down for the year.

Also factoring on the Aussie dollar plunge, as well as other currencies, was the closing of the Shanghai Composite Index at 3.55 percent on Friday. The Chinese economic data will be released on Tuesday and is feared to cause more falls in the Australian dollar for the week.

“The risk is that judging from recent leading indicators from China, the data continues to disappoint and that will further translate to more fears on how severe China’s economic slowdown is and weigh on commodity currencies,” Elias Haddad, senior currency strategist at the Commonwealth Bank of Australia, said.

Weakening oil prices also contributed to the fall of the dollar following the emergence of news that sanctions on Iran were lifted. The International Atomic Energy Agency believed that the country curbed its ability to develop an atomic weapon. Iran, in turn, announced that it is looking to increase oil production by half a million barrels per day.

“This adds to an already very bloated oil market,” OM Financial senior client adviser Stuart Ive was quoted by the AAP as saying.

Meanwhile, the Australian share market has also plunged in early trade. The benchmark ASX 200 index dropped 4,846 or 47 points, while the All Ordinaries index dropped 51 points at 4,898 on Monday. Supermarkets Woolworths (WOW) and Wesfarmers (WES) were the biggest gainers with $23.72 and $40.09 respectively, while mining giants BHP Billiton (BHP) and Rio Tinto (RIO) and Ramsay Health Care (RHC) declined at $14.64, $38.65 and $60.60 respectively.