With the Reserve Bank still hawkish on interest rates and the US still prevaricating on the debt ceiling, it’s no surprise that the Australian dollar has continued its upward climb.
Today the Aussie broke US$1.10 for the first time since the currency was floated back in 1983.
But local industry will not be greeting the continued climb positively. Tourism already reeling from Australia’s perception as an overly expensive destination, exporters are finding it almost impossible to compete with cheap labour elsewhere and retailers are concerned that shoppers are spending online, and overseas, rather than pay a higher price within the country.
Reacting to the climbing dollar, and general nervousness around the US debt talks, the ASX200 continued to slump and was trading at 4530 at 1:30pm today – 5% lower than the start of the year and 9% down on this year’s high in April of 4976.