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Aussie dollar slides after economy contracts more than forecast

Wednesday, December 7, 2016 - 09:38

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Australia's dollar dropped against all of its major counterparts after a report showed the economy contracted more than analysts forecast.

[TOKYO] Australia's dollar dropped against all of its major counterparts after a report showed the economy contracted more than analysts forecast.

The Aussie slid as much as 0.6 per cent versus the greenback after gross domestic product shrank 0.5 per cent in the three months to September from the previous quarter, compared with a median economist estimate for a 0.1 per cent contraction.

The currency slipped for the first time in three days Tuesday after the Reserve Bank of Australia held the key rate at a record low 1.5 per cent, with Governor Philip Lowe noting in his statement that "some slowing in the year-ended growth rate is likely, before it picks up again".

The Australian dollar fell 0.5 per cent to 74.26 US cents at 11:35am in Sydney from Tuesday, when it slipped 0.2 per cent. It has fluctuated around 74 US cents since dipping to a five-month low of 73.11 on Nov 21.

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