The IMF noted the expected weakness in the Eurozone, China, and Japan will be a drag on the world economy and limit growth to 3.5% down from their previous forecast of 3.8%.
Westpac senior market strategist Imre Speizer said the currency received a double hit in the last couple of days starting with poor data out of China yesterday.
“Sentiment soured slightly amid a global growth downgrade from the IMF and lower oil prices,” he said.
“The shift in global sentiment overnight has given the Australian dollar a slightly negative hue on the day.”
As the Australian dollar continues to fall, more and more Australians are choosing to stay at home rather than travel overseas according to data from St George Bank.
The report shows that up to 45% of Australians are putting off International travel because of the falling Aussie dollar.
The TRA’s assistant general manager Tim Quinn said during the last year there has been a significant reduction in Aussies travelling abroad.
“There has been a real sudden decline in Australians’ propensity to travel overseas,’’ he said.
“Following significant year-on-year increases in outbound travel commencing in the mid-2000s, the rate of growth in outbound trips is now showing signs of softening compared to when the Aussie dollar was around parity with the US dollar”.
“It’s domestic tourism which has picked up, driven by solid growth in the visiting friends and relatives segment, a segment worth $12.4 billion.”
Recommended Content
Editors’ Picks
EUR/USD hovers around 1.0700 ahead of German IFO survey
EUR/USD is consolidating recovery gains at around 1.0700 in the European morning on Wednesday. The pair stays afloat amid strong Eurozone business activity data against cooling US manufacturing and services sectors. Germany's IFO survey is next in focus.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold: Defending $2,318 support is critical for XAU/USD
Gold price is nursing losses while holding above $2,300 early Wednesday, stalling its two-day decline, as traders look forward to the mid-tier US economic data for fresh cues on the US Federal Reserve interest rates outlook.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin (WLD) price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.