The Australian dollar has taken another tumble today after more weak data out of China and a fall overnight in commodity prices.
At 2.30pm (AEDT) the Aussie dollar was trading at US71.18c, down from US71.59c in yesterday’s trade.
There are more worries over the Chinese economy after numbers out early this morning with the release of the Caixin China Services PMI for the month of December which came in at 50.2, its lowest level since July 2014.
This follows on from Monday’s Caixin China Services PMI, which also came in well below expectations, forcing an early closure to the Chinese stock market.
There was no appetite to hold the Australian dollar, as fears grow of more bad news to come out of the world’s 2nd largest economy with some now predicting that the Chinese government will have to intervene with further currency devaluations and more stimulus to stop the rout.
Also pressuring the Australian dollar was the drop in iron ore prices, which fell more than 2 percent towards US$42 a tonne on the back of Chinese data, and news that mining giants BHP (N:BHP) and Rio Tinto (L:RIO) plan to increase production at a time when the commodity is sitting near a 10 year low.
Adding to the woes, a survey last month taken by Reuters showed that Iron ore may fall to US$30 a ton in the first half of this year which will force the closure of small mines and inevitable job losses which won’t sit well for the Australian dollar.