Worse than anticipated employment data in December forced the Australian dollar down to its lowest level in nearly three-and-a-half years on Thursday, as traders dumped the currency.
The report, which capped the worst year in 17 years for Australian jobs growth, revealed that the local economy had shed 22,600 jobs for the month, while it had been expected to add 10,000 new positions. The dollar fell rapidly following the report, plunging below the US88c support level before stabilising at around US88.13c.
Many analysts expect that the dollar will continue to fall, although it is likely that it will be a more orderly decline in the coming months. While Westpac Banking Corp (ASX: WBC) senior currency strategist Sean Callow believes that the Aussie dollar’s range for the time being will be anywhere between US86c and US90c, others believe it is headed down towards the US80c mark.
The falling dollar is good for a number of Australian companies which rely heavily on revenues generated in foreign markets. Australia’s largest miners including BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) should benefit, as well as other companies such as ResMed Inc (ASX: RMD) and Cochlear Limited (ASX: COH).
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