The sinking of the Australian dollar is expected to get even worse:
THE Australian dollar will hit an all-time low of US47c by the middle of next year, a major French bank says.
Meanwhile, several economists are expecting official interest rates to fall to the lowest levels in almost half a century as Australia faces the biggest global economic turmoil since the end of World War II.
BNP Paribas says the domestic currency will plunge, from its present level of US65c, by the June quarter of 2009, as the economies of Australia’s major trading partners softened.
“The slowdown in the economies of Australia’s main trading partners, particularly in Asia, implies that export demand will soften,” the bank said in a global outlook report for December 2008.
“Nonetheless, net exports are likely to receive some benefit from the plunge in the Australian dollar exchange rate.”
The Australian dollar fell to an all-time low of US47.78c in April 2001 in the wake of the tech wreck.
A tumble to US47c would represent a 52 per cent dive since mid July when the Australian dollar reached a 25-year high of US98.49c. [AAP]
I think this news is going to spoil a lot of Australian vacation plans going to the US. However, I am willing to bet that domestic tourism by Australians will increase which is of course a good thing.