Australian dollar hits a five year low

ABC NEWS (Australia)

The Australian dollar hits a five year low and the US Dollar jumps higher in response to Donald Trump's plan to put tariffs on imports from Mexico, China and Canada.

Transcript

00:00The Aussie dollar fell to a new five-year low, below US$0.61, as the US dollar jagged

00:07higher in response to the plan to put 25% tariffs on imports from Mexico and Canada

00:12and 10% on imports from China.

00:16Currencies always tend to adjust to remove the effects of tariffs, and markets always

00:20tend to anticipate something they know is going to happen.

00:24The share market dropped 1.8% and there were some quite big falls, especially among mining

00:28stocks like Fortescue Metals.

00:30Falls above 2% were common.

00:33The selling today was basically in anticipation of a fall in the US tonight, and it'll be

00:38interesting which market falls the most – Mexico, Canada or the US.

00:42I don't really know which it'll be.

00:46Chinese market was still closed for the new year today, but Japanese stocks fell a quite

00:49chunky 2.9%.

00:52It was a big day for economic news here as well.

00:55Real trade fell 0.1%, which was taken as evidence that consumer spending is holding

01:00up pretty well.

01:02Building approvals rose 1% overall, but house approvals fell while apartment approvals jumped

01:074.4%.

01:09But there's still some way to go.

01:11Total approvals in December were 15,000, 5,000 short of the pace required to meet the National

01:17Housing Accord target.

01:19And we got house prices for January today as well.

01:22The national median price fell again, so the annual rate of price rises continued to fall.

01:28For perspective, the gap between house prices and the capacity to pay for a house has never

01:33been greater at about $400,000.

01:37So either interest rates have to be cut a lot, incomes have to rise a lot, or house

01:41prices have to halve for the gap to close, or a bit of all of the above.

Category

Transcript

Recommended