The Australian dollar has fallen to its lowest level in two years, trading at around 62 US cents, the weakest since October 2022.
Against the British pound, it dropped below 50 pence, experts considered it as a “milestone not” seen since the early days of the pandemic.
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The drop comes as global economic factors weigh heavily on the currency.
Federal Reserve Chair Jerome Powell said: “I think that a slower pace of (rate) cuts really reflects both the higher inflation readings we’ve had this year and the expectations that inflation will be higher” in 2025.
“We’re closer to the neutral rate, which is another reason to be cautious about further moves.”
The US Federal Reserve’s latest interest rate cut of 0.25 per cent, has further strengthened the US dollar.
Experts attribute the decline to a combination of factors, including falling commodity prices, a slowing economy, and ongoing uncertainty in China.
The local share market has also taken a hit, with the ASX200 dropping 1.7 per cent by midday, its lowest level since November.
However, there was some good news for the Australian dollar, which strengthened against the New Zealand dollar.
The Kiwi was hit hard by news that New Zealand’s economy has entered a recession, with GDP shrinking by one per cent in the September quarter.
Economists also warn the Australian dollar could slide further, possibly into the high 50 US cents range, a level not seen since 2003.
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