Finance Finance News Aussie dollar on a slide towards US81c

Aussie dollar on a slide towards US81c

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The Australian dollar weakness continues with the currency falling as low as US81.07 overnight then firming a little to US81.49.

The currency has fallen over 13 per cent since its July high of US94.24c pushing up prices for overseas travel and international online consumer purchases.

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The weakness was fuelled by  the US Federal Reserve upgrading its economic forecast, predicting  unemployment will drop to 5.4 per cent.

But the Federal Open Market Committee said it would have patience and not quickly move from its loose money policies.

The good economic news in the US will have the effect of boosting the US dollar  and leads market watchers to bet the Fed will raise US rates next year.

The Fed also said falling oil prices will boost the US economy.

The Westpac Melbourne Institute index released Wednesday also fuelled weakness by giving  a picture of a weakening economy and predicting lower growth next year.

It also accompanies news that the budget deficit has blown out by $10.6 billion to $40.4 billion and the national debt will more than double from the current $244 billion to $500 billion by 2020.

Iron ore prices, which account for 20 per cent of exports, have halved this year, oil prices have halved since mid 2010, coal prices are weaker and wheat prices are off 20 per cent this  year.

The outlook for the dollar is weaker with commodity prices expected to stay depressed and Reserve Bank chief Glenn Stevens calling for a price of US75c.

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