$A tipped to fall below 90 US cents soon

$A tipped to fall below 90 US cents soon

From: AAP

July 08, 2013

(Translation of this article appears in Arabic section)

THE Australian dollar this week could well fall below 90 US cents for the first time in almost three years as healthy US jobs data boosts the greenback.

At 0700 AEST on Monday, the local unit was trading at 90.53 US cents, down from 91.42 US cents on Friday.

The currency fell from 91.80 US cents late on Friday night to a low of 90.49 US cents three hours later after the American labour department revealed 195,000 US jobs were created in June, well above the consensus prediction of 166,000 new positions.

Westpac New Zealand senior market strategist Imre Speizer said the news boosted the greenback, as traders took it as another sign the US Federal Reserve would begin tapering its mass bond buying program, known as quantitative easing (QE), within months.

"A better economy and less bond buying by the Fed both have the effect of pushing US interest rates higher," he said.

"If US interest rates go up, relative to other countries' interest rates, its currency should go up."

Mr Speizer forecast the Australian dollar could fall below 90 US cents on Monday or Tuesday for the first time since early September 2010, despite a lack of US data.

"It's extremely vulnerable," he said.

"I have high confidence in the Aussie dollar visiting the 80s from this week onwards."


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