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| A mix of base metals legislated to be legal tender |
Original source
The Australian dollar has dropped below parity with the greenback for the first time in 2012 as investors fret over the outlook for the economy at home and abroad.
Overseas travel and shopping from foreign websites will be less attractive as the cost in local terms rises for Australian consumers.
The Australian dollar sank recently to as low as 99.96 US cents after threatening to break back through the parity level for some time. It hasn't bought less than $US1 since December 21 last year.
Sydney-based FOREX.com market analyst Chris Tedder said a variety of factors had conspired against the currency, will overseas factors playing a big role.
‘‘We don’t have a lot of upside for the Aussie at the moment," Mr Tedder said. “On the downside, we’ve got political uncertainty in Greece, we’ve got the Spanish banks, and disappointing economic data of late both domestically and in our largest trading partner - China.”
“It’s painting a bearish picture for the Aussie,” he said. “From here we’re going to see it continue to slip lower,’’ he said.
Adding to the dollar's headwinds, the Reserve Bank warned today that growth in non-mining sectors is likely to disappoint in the years ahead, even as the overall economy continues to expand.
‘‘Overall GDP growth is expected to return to around trend over the forecast horizon, with the recent reductions in the cash rate providing some boost to demand in the non-mining-related parts of the economy,’’ said RBA deputy governor Phillip Lowe in a speech in Melbourne.
Read more: http://www.smh.com.au/business/markets/dollar-sinks-below-parity-on-economy-worries-20120514-1ylqa.html#ixzz1uoNia800
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