Australia-Coping with economic downturn.

AUSTRALIA-FORECAST BLEAK FOR ECONOMY.

As the global economic outlook continues to deteriorate, with growth forecasts slashed and unemployment levels rising, the A$ has been relatively steady throughout February, trading between 63-67US¢. As at 4pm Thursday, the A$ was trading at 64.3US¢, back 8% since the start of 2009 and 27% below the corresponding day last year.

After starting 2009 just below 70US¢, the weaker global economic outlook, falling commodity prices and lower interest rates have assisted the decline in the A$. Along with the 8% decline against the US$ since the start of 2009, the A$ has fallen against the Japanese yen, by 5% to 60.1yen – a decline of 42% since peaking at 104.2yen in late July last year.

However, the A$ has halted its decline against some currencies so far in 2009, appreciating 2% against the European euro – although still at historically low levels. The A$ has also appreciated 4% against the NZ$, 3% against the Korean won and 1% against the Indonesian rupiah.

The latest International Monetary Fund outlook (released in late January) forecasts global economic growth to reach only 0.5% in 2009, down from 3.4% in 2008 and 5.2% in 2007.