Friday, September 22, 2000 Australian dollar hits all-time low

SYDNEY: The Australian dollar hit a new all-time low of 53.63 US cents yesterday, dragged down by the ailing euro. The local currency is now below the level it reached in the dark days of the Asian financial crisis in August 1998.

The euro set a new lifetime low overnight of 84.40 US cents, helping to take the Australian dollar down with it.

Also working against the Aussie dollar was the rise in the oil price to a new post-Gulf War high of US$37.80 a barrel.

Analysts predict the combination of a weak currency and a high oil price will lead to higher interest rates.

At its meeting next month, the Reserve Bank of Australia is tipped to raise the cash rate by 25 basis points to 6.5% in what would be the sixth interest rate rise in a row.

The New Zealand dollar also fell to yet another all-time low against the greenback Wednesday night, slumping to a value of 40.45 cents.

When trading opened in Wellington yesterday morning, it bounced back to 40.66 US cents, but analysts monitoring the declining value of other currencies against the US dollar were not ruling out another fall to below 40 US cents, Radio New Zealand reported.

The New Zealand dollar had hovered above 41 US cents throughout Wednesday before slumping in the evening on the back of declines in the Australian dollar, pound sterling and euro.

Reports said the Australian dollar also hit another all-time low of 53.06 cents in northern hemisphere trading during the night.--dpa

http://biz.thestar.com.my/news/story.asp?file=/2000/9/22/business/22b10low&sec=business

-- Martin Thompson (mthom1927@aol.com), September 22, 2000

Answers

This is serious stuff. I can't recall another recent history example of the bottom falling out from under a modern indstrializd country's currency like this.

-- JackW (jpayne@webtv.net), September 22, 2000.

Worst part of this is that the temporary addition to U.S. oil inventories of Clinton's move today, with the addition of 30 million barrels from the SPR, could make the Aussie dollar, and the Euro, even weaker. They have no comparable reserves to pull from.

-- Wellesley (wellesley@freeport.net), September 22, 2000.