The Australian currency, which dealers had predicted would reach parity with the greenback just three months ago, was trading at 0.6626 to the US unit on Monday, compared with 0.7750 during trade on October 6.

'We have seen the largest daily drops in the Aussie since the currency was floated in the early 1980s,' Mr Josh Williamson, Senior Strategist at TD Securities in Sydney, told AFP.

The unit was some 32 per cent below its July 15 high of US$0.98 after declining commodities prices and Australian interest rates led to a fall that significantly sped up as the global financial crisis erupted, he said.

It hit a series of five year-lows, sinking to 0.6331 to the US dollar Friday as global stocks and commodity values plunged amid panic over whether the global crisis can be stemmed and whether it will lead to worldwide recession.

The 'Aussie' recovered on Sunday after the Australian government said it would guarantee the nation's A$700 billion dollars (S$684 billion) worth of bank deposits for the next three years, allaying some investor fears.

Despite the parlous state of the US economy, the epicentre of the financial crisis, investors have been fleeing other currencies for the traditional safe haven US dollar or using the greenback to buy US Treasury Bonds, Mr Williamson said. -- AFP