The Australian dollar has dropped below 87 US cents as global economic growth concerns weigh on risk appetite.
Early on Monday, the local currency was trading at 86.96 US cents, down from 87.79 cents on Friday.
The Australian dollar started on a downward spiral last week after economic growth forecasts for Germany, Europe’s largest economy, were lowered.
That sparked a tone of risk aversion, with global share markets tumbling on Friday.
“Sentiment rather than new news drove the moves,” National Australia Bank global co-head of FX strategy Ray Attrill said.
Attrill said the US dollar rose against all currencies but the Australian dollar was the “biggest loser” of the G10 currencies.
“In currencies, the US dollar rose against everything bar the Japanese yen, the latter still proving its mettle as the pre-eminent safe-haven currency,” he said.
Australian stocks continue to fall, starting the week nearly one per cent lower after posting the biggest decline in 15 months on Friday.
Before Monday, the share market had lost more than eight per cent, or more than $130 billion, in value since early September.
Last week was the worst of the year in trading on global markets.
There could be relief if official Chinese trade balance figures due out at lunchtime (AEDT) show solid growth coupled with US markets being closed on Monday night, said CMC Markets chief market analyst Ric Spooner.
“We might set ourselves up for a little bit of a turnaround,” he told AAP.
“The risk is to the downside though. With US and European markets sold quite a bit, there is downward momentum and I don’t think the market is likely to be collectively brave enough to respond positively to a good set of numbers.”
All sectors had made losses.
Conglomerate and Coles owner Wesfarmers had dropped 93 cents, or 2.3 per cent, to $39.90 and Woolworths was 39 cents, or 1.2 per cent, lower at $33.34.
Energy stocks were all down despite oil prices recovering slightly.
Woodside Petroleum had dropped 33 cents to $38.37, Santos had lost eight cents to $12.51 and Oil Search was 11 cents weaker at $8.24.
Among the banks, Commonwealth Bank dropped 60 cents to $74.20, ANZ lost 31 cents to $30.91, Westpac shed 30 cents to $31.95 and NAB was 23 cents weaker at $31.69.
