Weak growth sends $A below 70 US cents

1.Weak growth sends $A below 70 US cents

Sydney

(Australian Associated Press)

The Australian dollar twice dipped to new six year lows below 70 US cents on Wednesday, rocked by weaker than expected economic growth and a slowdown in Chinese manufacturing.

The local currency dropped to 69.89 US cents at 1130 AEST as official data showed economic growth of 0.2 per cent in the June quarter and 2.0 per cent in the year to June.

Economists had expected a quarterly growth rate of 0.5 per cent and an annual rate of 2.2 per cent.

The Australian dollar had earlier broken below 70 US cents for the first time since April 2009 because of disappointing Chinese manufacturing data.

Easy Forex currency dealer Andreas Tjahja said the Chinese data offered more evidence that its industrial machine is stalling, rattling global equities.

“A lot of it is risk aversion, equity markets are shaky at the moment,” he said.

US, Asian and European stocks tumbled overnight after China’s index of manufacturing activity came in at 49.7 in August, its lowest in three years.

The Australian share market fell more than two per cent on Tuesday after the data was released, and was more than one per cent lower in early trade on Wednesday.

It did, however, pick up to close flat.

The Aussie dollar has already tumbled about 20 per cent in the past year on the back of soft demand for commodities and slower growth in China.

At 1637 AEST, the Aussie dollar was worth 70.3 US cents.

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