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Bloomberg
The Australian dollar tumbled to the lowest level since the early days of the Covid pandemic as risk aversion swept across markets. The Aussie declined 0.4% against the US dollar to 0.6674, the lowest level since 2020.
Investors piled into the safe-haven US dollar and sold risky assets after the World Bank reported that the global economy may face a recession next year. Policy makers around the world are rolling back monetary and fiscal support at a degree of synchronisation not seen in half a century, according to the study released in Washington.
Part of the move has also been driven by concern over economic growth in China, Australia’s largest trading partner. The consensus in a Bloomberg survey is for the economy to expand 3.5% this year, which would be the second-weakest annual reading in more than four decades. Forecasters at Morgan Stanley and Barclays are among those predicting even slower growth as risks mount into year-end.