The Australian dollar fell to a six month low at US89.32 – the lowest since March, as the US dollar surged against all G10 currencies. Iron ore prices also attributed to the local currency dropped, as it fell to a five year low.
Despite the drop, economists remain optimistic, with CommSec Chief Economist Craig James stating that the AU dollar is leveling to commodity prices. Job vacancies are also on the rise and is expected to pick up as it recovers from the mining boom slowdown. Surprisingly, the property market is set to benefit from the currency drop, as prices are set to rise with the interest rate expected to remain on hold for at least another year. Forecasts from SQM Research show that if the AU dollar were to drop below US85¢, Sydney prices could increase around 8% – 12% and 5% – 9% for Brisbane and Melbourne over the next year.
Read more about this on the Sydney Morning Herald website.