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Dollar at three year low

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The Australian dollar has hit fresh three-and-a-half-year lows as the strengthening US economy continues to boost the greenback.

At midday Monday, the Australian dollar was trading at 87.63 US cents, down from 88.15 cents on Friday.

The Australian dollar has been headed downward since weaker-than-expected jobs data last week but on Monday fell as low as 87.56 US cents against the strong greenback.

“It’s about US dollar strength more than Aussie dollar weakness today,” Easy Forex currency dealer Tony Darvall said.

“We’ve hit new lows and we’re seeing US dollar strength against the euro, pound and NZ dollar.

“The weaker-than-expected jobs data last week has cemented the downside view at the moment.

“We’re probably going to trend lower without any major catalyst. The big target for the Aussie is 85 US cents, that’s where the market wants to go to now.”

Mr Darvall said the market would now look forward to consumer price index figures, to be released on Wednesday.

“CPI is extremely important for whether the RBA (Reserve Bank of Australia) can move or not,” he said.

“If inflation data comes in stronger than expected, it’s very hard for them to do anything, even with that weak jobs data.”

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