The Australian dollar is trading lower today after a slump in the iron ore price amid worries over a lack of demand from China.

At 7.04pm (GMT) the Aussie dollar was trading at US72.16 down from US72.58 at yesterdays close.

After reaching a 7 year low of US$45 in July, Australia’s biggest export had been on the recovery trail, rebounding to US$59 in September.

Since then it has been on a downward spiral, as worries over China surface reaching a level of US$52 yesterday, and heading extremely close to the psychological US$50 number.

At US$50 a tonne, the big players are still profitable but it is difficult for the smaller ones with many predicting that if Iron ore falls much further a lot of them will go out of business.

The Australian dollar ran into stiff resistance at the US73c mark yesterday and after today’s fall found strong support at the US72c level as bargain hunters stepped in.

The big test for the Aussie dollar tonight will be the release of the National Australia Bank’s business conditions survey, which may see the Australian dollar break down through the US72c mark towards the next support level of US71.90c if the news disappoints.