Dollar to fall with commodities

Economists are tipping the Australian dollar will plunge towards US50c by the end of 2009 due to a decline in mining activity and falling commodities prices, The Daily Telegraph reports.

Economists are tipping the Australian dollar will plunge towards US50c by the end of 2009 due to a decline in mining activity and falling commodities prices, The Daily Telegraph reports.

“Our forecasts are that the Aussie dollar by the end of March will be US63c, and we’ve got US58c in June and US54c by the end of the year,” ANZ senior currency strategist Tony Morriss said.

The losses are largely due to continuing sharp drops in the price of Australian commodities.

“Australia’s main two commodities have been iron ore and coal and those prices have turned around quite sharply as conditions in China and other parts of Asia deteriorate,” Morriss said.

The price of copper, traditionally tied very closely to the Australian currency, also dropped 4.4% overnight.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.