The Australian dollar has slumped, falling to its lowest level in two years.
The euro and Australian dollar also lost value.
The drop in the Australian dollar was sparked by a shock announcement from the Australian Reserve Bank about its plan to buy $US40 billion ($46.7 billion) in foreign bonds, which could be the first major bond purchase since the global financial crisis.
The announcement also sparked concerns about the future of the global economic recovery, which has been slow and fragile in recent years.
“Australia is facing a very challenging time with unemployment hovering around 10 per cent and the economy continuing to contract,” said Robert Peston, chief economist at CMC Markets.
“The impact of this on households and businesses will be felt for years to come, and the impact on the broader economy is also uncertain.”
A dollar fell to 71.75 US cents, its lowest since mid-January and the lowest since May 2018.
“It’s been a very, very rough year for the Australian economy,” said Mr Peston.
The big concern for the budget is the impact it will have on the cost of living.” “
But what we’re seeing is the impacts on the budget, which is the biggest concern.
The big concern for the budget is the impact it will have on the cost of living.”
Australia’s central bank, the Reserve Bank, said the new bond purchases will boost the economy by about 1 per cent over the next three years.
While it is unclear how much the bond purchases cost the economy, the central bank said the money would boost investment and reduce the cost to the taxpayer. AAP/ABC