Dollar falls below US80c, oil price at five month low, unemployment falls – expectations all head south: Economy roundup

Exporters rejoice! The Australian dollar has slipped below US80c this morning after being buffeted from a number of different directions.

Exporters rejoice! The Australian dollar has slipped below US80c this morning after being buffeted from a number of different directions.

After hovering around US95c for much of the year, the strengthening of the US currency and falling commodity prices has pushed the Australian dollar down steadily over the last six weeks.

The morning the currency was under more pressure as a result of a 0.5% cut in official interest rates in New Zealand. Currency traders have been selling off all regional currencies and the Australian dollar has not escaped the fallout.

The fall in the dollar is great news for exporters, but bad news for motorists. Oil prices have dropped about 30% since mid-July, when it hit a record high of over $US147. This morning the oil price fell to a new five-month low, hitting $US103 a barrel because of weak demand from the US.

But because of the strength of the Aussie dollar, the size of the fall in oil prices has not translated to big falls in petrol prices in Australia – in the last three weeks, petrol prices have actually climbed 2.7% according to CommSec.

This morning’s big economic news came in the form of unemployment data. The unemployment rate fell slipped 0.2% in August to 4.1%. The economy added 14,600 jobs in August, with an extra 7500 full-time and 7200 part-time positions.

Meanwhile, the sharemarket fell again in morning trade as investors continue to fret over the state of big US investment banks such as Lehman Brothers.

The benchmark S&P/ASX200 index fell 44.1 points or 0.8% to 4861.4 by 11:50am AEST, following a 1.5% drop on Wednesday.