Well, this sucks. Don’t plan any trips to the United States just yet, because the Australian dollar just dropped below $0.70 US, the lowest it’s been in three years and an almost 1% decrease since the latest manufacturing figures in China revealed the trade war between themselves and the US is damaging their economy.
As of 7am this morning, one Australian dollar was buying 69.9 US cents. That’s almost 14% less than the 81.09 US cents in January last year. It’s a drop that analysts are saying could indicate an overall slowdown in global economic growth.
Speaking to the ABC, Ryan Nauman, market strategist at Informa Financial Intelligence, explained that “Despite the new year, there is a continuation of the same issues that have plagued 2018 and the recent manufacturing numbers from China and Europe just add to the tension.”
Analysts are attributing the continued drop of our dollar to a dent in commodity prices, such as copper and aluminium.
While it sounds pretty bleak, and it kind of is if you’re planning to travel overseas, apparently it’s not all bad news. Speaking with the Sydney Morning Herald, chief economist for Australia at HSBC Holdings, Paul Bloxham explains that “a lower Aussie dollar is certainly helpful for the Australian economy.”
As of October last year, there has been some progress there, with the economy going up by an annual 3.4% in the second quarter and unemployment dropping to 5.3%. Good enough to outweigh that whole exchange rate thing? Probably not. But you know, silver linings and such.Image: Know Your Meme