<?xml version="1.0" encoding="ISO-8859-1"?> <docID>336083</docID> <postdate>2025-01-03 07:28:38</postdate> <headline>Aussie dollar nears lowest level since covid</headline> <body><p><img class="size-full wp-image-336084" src="https://citynews.com.au/wp-content/uploads/2025/01/20241221114733269955-original-resized.jpg" alt="" width="900" height="601" /></p> <caption>The Australian dollar's slide could be good news for exporters but bad news for motorists. (Bianca De Marchi/AAP PHOTOS)</caption> <p><span class="kicker-line">By <strong>Derek Rose</strong></span></p> <p><strong>The local currency is nearing its lowest level since the early days of the COVID-19 pandemic in what could be bad news for travellers and motorists, but good news for exporters and tourist operators.</strong></p> <p>During the new year holiday, the Aussie slipped to less than 62 US cents for the first time since October 2022, when it traded at that level for three days.</p> <p>That brief stretch aside, the Aussie has not been as low since late March and early April of 2020.</p> <p>By late Thursday, the dollar had rebounded somewhat, buying 62.15 US cents - still down almost 10 per cent from the start of October.</p> <p>The slide has been more a matter of US dollar strength than Australian dollar weakness, with the greenback rising 7.6 per cent to a 26-month high against a basket of six other currencies during that time.</p> <p>Donald Trump's victory in the US presidential election and his promised policies of tax cuts, increased spending and tariffs have led to a more cautious outlook on US rate cuts for 2025, with fewer expected than previously predicted.</p> <p>IG analyst Tony Sycamore said Trump was likely to implement tariffs on imports, which would dampen growth expectations outside the US and weigh on commodity prices.</p> <p>The Australian and New Zealand dollars were particularly vulnerable to risks of Chinese tariffs, he said.</p> <p>A dovish pivot by the Reserve Bank in December after the release of lacklustre third-quarter gross domestic product figures has also put pressure on the Australian dollar as interest rate differentials play a big role in determining currency values.</p> <p>Mr Sycamore said the Aussie had priced in a lot of bad news in a short time and could rebound from here if it managed to hold above that 61.70 level from October 2022.</p> <p>Falling through that support level would open the way for a slide to 60 US cents, he said.</p> <p>A weaker Australian dollar would make holidays in the US more expensive and increase the price of imported goods including petrol and vehicles.</p> <p>However, it would also make Australian exports more competitive and make the country a more attractive tourist destination.</p> <p>None of the big banks have changed their predictions for rate cuts in 2025 despite the slide in the currency.</p> <p>The Aussie has also been falling against the British pound.</p> <p>It fell to less than 50 pence in December for the first time since early in the pandemic, buying 49.59 pence on Thursday evening.</p> </body>