The Australian dollar is trading above the US78c mark today as fears grow the high value of the currency is going to hamper the export sector.
At 7.07pm (GMT) the Aussie dollar was trading at US78.12c, trading as high as US78.21c earlier today.
In recent months, the Australian economy has begun to diversify away from the mining boom and into other industries pushing the Aussie dollar higher, which has now created a dilemma.
For the trend to continue the local currency has to drop to around US70c and not near US80c where it is nearly now.
Capital Economics' chief economist Paul Dales noted that the current level of the Australian dollar is already starting to hit the economy.
"Indeed, if it just remains at current levels, then net exports will shift from adding to gross domestic product growth to subtracting from it”. He said
"This is especially worrying at a time when investment has remained muted and households have become more cautious," he added.
The Aussie dollar has been on a winning run ever since oil prices rebounded after falling sharply when the world’s biggest oil producers couldn’t come to an agreement to cut production
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