Australian dollar hits new lows below 1.01 to Singapore dollar on China woes

The Australian dollar also fell to new all-time lows against the Singapore currency on Wednesday morning.
The Australian dollar also fell to new all-time lows against the Singapore currency on Wednesday morning.PHOTO: BLOOMBERG

SYDNEY (REUTERS, BLOOMBERG) - The Australian dollar plunged to fresh six-and-a-half-year lows on Wednesday (Sept 2) after a soft second quarter gross product report encouraged already-bearish speculators to sell even more aggressively.

The Aussie unit skidded to as far as 69.86 US cents, sinking below 70 US cents for the first time since April 2009. It has dropped 4 per cent over the past month, the biggest loss among Group-of-10 currencies after the New Zealand dollar, as stocks slid.

The Australian dollar also fell to new all-time lows against the Singapore currency on Wednesday morning. It was trading at 1.0117 to one Singdollar as of 9.37 am, from its close of 1.0015 on Tuesday.

The Aussie dollar had already shed 1.4 per cent on Tuesday following another stormy 24-hour session across the globe.

Investors have been aggressive sellers of the Aussie in recent weeks in large part due to heightened concerns about a hard landing for the Chinese economy.

The latest blow was news that the economy grew a sluggish 0.2 per cent quarter-on-quarter in the second quarter, the slowest pace in two years and well short of forecasts for 0.4 per cent.

"The good news is that Australia has avoided a negative GDP number but the bad news is that growth remains extremely weak," said Dr Shane Oliver, chief economist at AMP Capital Investors. "I think the door is wide open to cut rates despite what the Reserve Bank of Australia says. They will have to cut again."

On Tuesday, the central bank kept rates at a record low of 2 per cent, saying monetary policy needed to be accommodative as low interest rates were acting to support borrowing and spending.