The Australian dollar has continued to slide against the US dollar, making it one of the worst-performed currencies in the developed world this year.

At 4pm AEST on Tuesday, the Australian dollar was worth $US0.7380 cents, its lowest level since June 2017.

And there could be worse to come, with one fund manager predicting the Australian dollar could fall to the mid-60-cent mark within 12 months.

Westpac analysts say the local currency had been a clear underperformer on markets overnight, hitting its lowest point in more than a month – but for no obvious reason.

“The US dollar index is unchanged on the day,” the analysts said in a note on Tuesday morning.

Apart from comments from Federal Reserve Bank of Atlanta president Raphael Bostic and his New York counterpart John Williams, “there was no data of note to report”, the analysts added.

With regards to the Australian dollar’s movements on Tuesday, the analysts had said the key support level of $US0.7410 (the May low) “continues to look vulnerable” – that was before it broke through that barrier and hit $US0.7380 on Tuesday afternoon.

The slide is a continuation of a weakening Aussie dollar which has slipped more than 4 per cent against the US dollar this year, and is the worst-performing Group of 10 currency after the Swedish krona.

The Aussie dollar has also slumped against the Japanese yen and the euro.

Dollar to fall even further

Meanwhile, a Sydney-based fund manager had predicted the Australian dollar to slump even further, under pressure from a stronger US dollar.

Vimal Gor, the head of income and fixed interest at Pendal Group, told a finance conference at the weekend that the Australian dollar may fall more than 10 per cent to the “mid-60s” US cents within 12 months.

A hawkish Federal Reserve will continue raising interest rates “until something breaks”, while its Australian counterpart stands pat, he reportedly told the conference, according to Fairfax Media.

His comments follow the June 5 decision by the Reserve Bank of Australia (RBA) to keep interest rates on hold at a record low of 1.5 per cent.

In delivering the decision, RBA governor Philip Lowe highlighted concern over the outlook for household consumption amid sluggish wages growth and high debt.

While trade tensions between the US and China, and soft jobs data in Australia have had an impact on the local currency, US monetary policy is the main factor behind the slump.

ING put out a note on Monday branding US monetary policy “the real source of menace” for the Aussie dollar.

By contrast, the US Federal Reserve hiked rates this week, making it the second increase this year. It has also forecast a further four increases in 2018, as unemployment falls and its inflation targets are being overtaken faster than it had previously projected.

-with AAP