Dollar sinks, stocks to fall

THE Australian dollar sank to its lowest mark against the greenback in almost eight months overnight and local shares are poised to resume their slide after weak US jobs figures added to concerns about the strength of the global economy.

The Aussie dollar hit 96.34 US cents before clawing back to trade near 97 US cents, capping five weeks in a row of losses against the greenback.

Local shares are set to sink when they open on Monday, with SPI200 futures down 58 points, or 1.4 per cent, to 4012.

A loss of that amount would drag the ASX200 index near the key 4000-point mark, a level it's not breached since November 28 last year.

The renewed slump on global markets will add pressure on the Reserve Bank to cut its cash rate again when it meets to set interest rates on Tuesday. Investors view the likelihood of another 50 basis-point cut as a 50-50 chance, with a 25 basis-point reduction deemed a certainty. Economists, though, are divided on whether the central bank will lower the cash rate or leave it at 3.75 per cent.


Topics:  aud australian economy exchange rate stock market united states economy

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