The Australian dollar has fallen back significantly after the US central bank signalled it could introduce economic stimulus measures in the near future.
At 7am AEDT, the local unit was trading at 103.81 US cents, down from 104.52 cents on Wednesday - a fall of nearly three-quarters of a US cent.
BK Asset Management managing director Kathy Lien said the Aussie currency had followed US stocks down, following comments from the US Federal Reserve suggesting it was considering a bond-buying program to stimulate the labour market.
‘‘They expressed renewed concerns about the US economy,’’ she said.
Advertisement ‘‘I think investors are realising that this concern from policy-makers, including in the US, means the potential for slower growth for Australia.
‘‘So, although the comments should be US-dollar bearish, the selloff in US stocks is having a much greater impact on the Aussie dollar.’’
In the minutes of its October 23-24 meeting, the Fed said it could unveil a US Treasury-buying program to replace the current ‘Operation Twist’, which expires at the end of the year. Ms Lien said that with little to support the Australian dollar on Thursday, it would be unlikely to rise much above 104 US cents.
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