Australian dollar hits five month low as $US rallies

THE Australian dollar has hit a five-month low as the US dollar continues its surge against most of the major currencies.

Australian currency.

THE Australian dollar has hit a five-month low as the US dollar continues its surge against most of the major currencies.

At 0700 AEST on Wednesday, the local unit was trading at 92.02 US cents, down from 92.69 cents on Tuesday.

In the early hours of Wednesday morning, it fell as low as 91.88 US cents, the currency’s weakest level since March 26.

National Australia Bank senior economist Spiros Papadopoulos said currency and share markets continued to weaken ahead of the US Federal Reserve ending its economic stimulus program.

“Equity markets have lost further ground in the aftermath of the San Francisco Federal Reserve research paper which suggested that investors have been underestimating the odds of an earlier US Federal interest rate hike,” he said.

“NAB continues to see the risks to the Australian dollar on the downside and we expect to see it below 90 US cents in the coming months.” The greenback overnight hit an almost six year high against the Japanese currency of 106.48 yen, and 77.77 euro cents, which was a 16 month high.

Economic data that will be of interest to the market on Wednesday includes the Westpac/Melbourne Institute Survey of Consumer Sentiment.

Originally published as Australian dollar hits five month low as $US rallies