The Australian dollar pulled back in late trading on Thursday as Standard and Poor's warned that Australia's federal budget could be hit by global economic worries which may effect its AAA rating.
At 3.47pm (GMT) the Aussie dollar was trading at US77.87c after reaching a high of US88.46c in yesterdays trade.
Recent sharp falls in commodity prices and especially Iron ore, Australia's biggest export is having an effect on the local budget which may cause a downgrade in ratings,
"Australia's budget outlook has weakened sharply in the last six months as commodity prices have plunged," a Wall Street Journal report showed, citing S&P's sovereign analyst Craig Michaels.
"Sliding prices of coal and iron ore, the country's biggest export, are hurting economic growth, denting corporate profits, driving higher unemployment and eroding government tax receipts," he warned.
Some analysts think that the Aussie dollar may have hit the bottom like Market Economics managing director Stephen Koukoulas who said the Australian dollar may have bottomed out and now might be the time for a bargain,
"It is always, always, always difficult to pick bottoms in currency markets, but that is what I am trying to position for with the Australian dollar," Mr Koukoulas said on his blog.
"It is now time to think about getting cautiously long, and anticipate some greater risk of a return to US80¢ and even US85¢ than a scenario of a sustained break towards US75¢. Trades that profit from the AUD [Australian dollar] ending 2015 at US82.5¢ and higher seem to be risks worth taking."
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