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Aussie dollar nosedives amid commodity prices fall

Xinhua, May 4, 2017 Adjust font size:

The Australian dollar tumbled more than half a cent against its U.S. counterpart on Thursday, as commodity prices fell sharply and the U.S. dollar strengthened.

At the Asian open, one Australian dollar was buying 74.25 U.S. cents, down from the 74.89 U.S. cents it was trading late Wednesday.

The Australian dollar was affected by the sharp fall in iron ore, and base and precious metals, according to chief currency strategist at the Commonwealth Bank Richard Grace who told Xinhua in a statement that the local currency shouldn't, however, fall much further.

"Given the synchronised global economic growth is likely to support commodity prices, and U.S. dollar upside is limited," Grace said.

"The Australian dollar is also set to gain support from the improvement in Australia's current account deficit, currently 0.9 percent of GDP, and set to average 0.6 percent of GDP over 2017."

Grace also said that with a large trade surplus result expected later on Thursday, along with the fact that the Australian dollar is trading at a three and a half month low, should see buying opportunities for institutional investors.

At 0821 local time AEST, one Australian dollar is buying 74.25 U.S. cents, while crude oil is trading at 47.62 U.S. dollars per barrel. Endit