The Australian dollar dropped below 75 US cents to a six-year low as the heightened risk of a Greek exit from the euro added to the pressure from slumping commodity prices, Bloomberg News reported.
“There were a number of factors that were already driving the Aussie lower, including weakness in the terms of trade and the strengthening of the US dollar,” said Robert Rennie, the global head of currency and commodity strategy at Westpac Banking Corp. in Sydney.
“The Aussie is heading down toward 72 to 73 cents, the only question is how quickly it gets there, and the impact of the Greek referendum on risk assets has given it an extra push.”
Reserve Bank of Australia chief Glenn Stevens said in December he would prefer about 75 US cents for the Aussie.
He spoke repeatedly this year of the need for a lower exchange rate and cut the cash rate in February and May to help the economy cope with the collapse of a record mining investment boom.
“The current level of the exchange rate, particularly on a trade-weighted basis, continued to offer less assistance than would normally be expected in achieving balanced growth in the economy,” the RBA Board said in minutes of its most recent meeting published on June 16.
“A further depreciation therefore seemed both likely and necessary.”
The currency dropped as much as 0.9 percent to 74.53 US cents and traded at 74.56 US cents as of 5:52 a.m. in Sydney. It has weakened 8.8 percent this year.
With 76 percent of the votes counted in the Greek referendum on austerity measures required for financial aid, “no” was ahead with 62 percent, the news agency said, citing data from the country’s interior ministry.
In addition to jawboning the currency, the RBA has sought to reduce the attractiveness of the Australian dollar by cutting its cash benchmark by 2.75 percentage points since late 2011 to a record low 2 percent.
That still leaves it above every other developed-nation peer except for New Zealand and the global hunt for yield remains a source of support for the Aussie, Bloomberg said.
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