Monday, May 21, 2012
Aussie Dollar to plunge if Greece quits Euro
THE Australian dollar could fall below US90¢ if Greece pulls out of the eurozone, the chief currency strategist at Commonwealth Bank warned as leaders from the G8 group of nations worked over the weekend to combat the region's financial turmoil.
The dollar fell to US98.24¢ on Friday, its lowest level in nearly six months, after Moody's downgraded 16 Spanish banks, and the Fitch Ratings agency reduced Greece's credit rating to CCC on fears that anti-austerity parties would win the country's new elections.
Currency strategists say if Greece pulls out of the eurozone the dollar could fall much further.
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Last week the S&P/ASX200 suffered its worst five-day return since September, shedding 5.6 per cent in value. The local bourse shed 110.9 points on Friday, or 2.67 per cent, to 4046.5 points, its biggest one-day loss since November.
Not helping the local market were increasing concerns that the Chinese economy is slowing appreciably. The big miners were among the stocks sold off the most last week.
In the US the Dow Jones Industrial Average shed 73.1 points, to 12,369.4, and the S&P500 index losing 9.64 points, or 0.7 per cent, to 1295.22.
Read more: http://www.smh.com.au/business/dollar-to-plunge-if-greece-quits-euro-20120520-1yz10.html#ixzz1vRxHvxmj