How low can the Australian dollar go? | The Business | ABC News

The Australian dollar has been under a lot of pressure since October 2023, recently dropping to five-year lows against the greenback. The local currency is sliding thanks to a strong US dollar, sluggish domestic performance and Australia's ties to a weak Chinese economy, sending the price of commodities lower. The price of iron ore has fallen from an 2021 all-time high of almost $US220 dollars a tonne, to just over $US100 dollars a tonne. A weaker dollar pushes up the price of US imports, making the inflation fight and the task of lowering interest rates more difficult. The Aussie dollar has been falling against a basket of currencies in recent months, including the pound, euro and US dollar. The weaker currency is welcome news for businesses that export to countries like the US, but it can be a drain on travellers' budgets and hit import businesses. The unpredictability of president Donald Trump, and uncertainty around US interest rate cuts, makes the Australian dollar vulnerable to further weakness.
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