Australian Dollar Plummets To A Ten-Year Low


The Australian dollar is in dire straights after falling to record lows overnight after the Reserve Bank cut interest rates by 25 basis points.

The Australian dollar hit a record 10-year low, the lowest it has been since the global financial crisis (GFC) , falling to 66.77 US cents. The last time we saw a drop like this was in March 2009, when the Australian dollar bottomed out at around 67.44 US cents.

The currency has been on a gradual deterioration for more than one and a half years, and has resisted recovering positively since this time.

US-China Trade War

It is apparent throughout history that when other global economies are in turmoil, then the Australian dollar is seen as a safe haven, and responds effectively and strongly to this. However, since the US-Chine trade war, the Australian dollar has been adversely affected.

Philip Lowe, RBA Governor, commented on the rate cut;

“The US-China trade and technology disputes are affecting international trade flows and investment as businesses scale back spending plans because of the increased uncertainty.”

“In China, the authorities have taken further steps to support the economy, while continuing to address risks in the financial system.”

Although, the problems are not only related to global issues, they also fall in our own back yard. The rate cut has also been put in place due to a lack of growth in wages, with a “weaker than expected” growth of only 1.4 percent in the last quarter alone.

Lowe also commented on this issue, stating,

“The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending.”

Unemployment is at an all time high, sitting at 5.4 percent, which is well above the preferred level of 4.5 percent.

The Chinese Yuan has been linked extremely closely to the trends of the Australian Dollar. Currency experts  are predicting that that Australian dollar will remain under pressure as long as the Chinese yuan is continueing to fall, which dipped to an eleven year low of 7.147 per US dollar on Monday 24th February, 2020.

Westpac Senior Currency Strategist, Sean Callow reported to media,

“When there’s a sharp move in the Yuan, the Aussie dollar does tend to react in the same direction.”

“Any time that you see that it has a ripple effect around the region, other currencies weaken in sympathy and the Aussie dollar goes with it.”

Australian Share Market Falls

Not only has the Australian dollar taken a huge plummet, the Australian share market too took a massive hit, losing around $30 billion upon opening on Monday 24th February, 2020.

Come the afternoon trading session, the ASX 200 index had lost 100 points, or 1.55 percent.

Petrol Prices Skyrocket

Petrol prices across the country are at four year highs, according to the consumer watchdog.

In a recent quarterly report published in June 2019, the Australian Competition and Consumer Commission (ACCC) has reported that an annual price of petrol in Australia’s five largest cities is sitting at 141.2 cents per litre, that is 7 cents per lite higher than the previous year, 2018.

ACCC Chairman, Rod Sims has linked the AUD and USD exchange rate as the most significant contributor to the petrol price hike.

“The AUS-USD exchange rate is a significant determinant of Australia’s retail petrol prices because international refined petrol is bought and sold in US dollars in global markets.”


As reported across the major Australian news channels this morning, Tuesday 25th February 2020, they have suggested that you call your superannuation company to check what rates you are earning on your super, as well as exactly what fees you are paying.

Superannuation companies are underperforming, and the recent price drop will affect their performance.

Investing your superannuation into cryptocurrency has fast become a popular action to take among people looking to safeguard their hard earned money.

This is a relatively new action, however, it is proving to be very financially profitable, as certain firms are earning their members a minimum of 12 percent returns per annum on their superannuation, compared to 6-7 percent.

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