THE Australian dollar has backed away from the highs it reached on Wednesday, weighed down by falling iron ore and oil prices.
At 0700 AEDT on Thursday, the local dollar was trading at 79.35 US cents, down from 80.00 cents on Wednesday.
On Wednesday, the currency shot up more than one US cent to peak at 80.25 US cents after new data showed that headline inflation rose 0.2 per cent in the December quarter, for an annual rate of 1.7 per cent for 2014, in line with market expectations.
Westpac senior market strategist Imre Speizer said concerns about the policies of the new Greek government and the possibility of an interest rate cut in Australia next week are putting downward pressure on the Australian dollar.
“Commodities continued to slump, the CRB index down 1.3 per cent to a six-year low,” he said.
“Concerns regarding Greece’s fiscal future mounted, the country’s stockmarket falling 9.2 per cent to 2012 levels.” Syriza, which won Sunday’s general election in Greece, wants to renegotiate its bailout package and opposes the austerity measures that are linked to the package.
Mr Speizer said there wasn’t much of a reaction to the US Federal Reserve’s statement, made after its two-day policy meeting, showing it was still taking a “patient” attitude over the possibility of raising its interest rate.
“The statement largely met expectations. The term `patient’ was retained and had only minor market impact,” he said.
Ameeta Parsuram ‘Meeta’ Psychologist, Poet & Lyricist