$A lower as US fiscal cliff looms

The Australian dollar has fallen by more than half a US cent on concerns United States politicians will fail to agree on measures to avoid billions of dollars in tax rises and spending cuts due to begin in January 1.

At 0700 AEDT on Monday, the currency was trading at 103.98 US cents, down from 104.53 cents on Friday afternoon.

Bank of New Zealand currency strategist Mike Jones said the Australian dollar had weakened as negotiations on new measures to avert the so-called fiscal cliff continued without progress.

"It's really a fallout from fiscal cliff developments that took a chunk out of the Aussie dollar," he said.

"On Friday, the Republican `Plan B' didn't manage to get through the House (of Representatives), and now the market is fretting that they might not get a deal until the end of the year.

"So the US economy might temporarily fall off the cliff."

Republican speaker John Boehner had proposed a plan to let tax breaks expire for US millionaires, but it failed to earn enough party support.

Mr Jones said it was unlikely that any measures to avoid the fiscal cliff would now be agreed upon before the end of the year.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9322-0.001-0.11%
    AUDUSD=X
    0.5552-0.0003-0.05%
    AUDGBP=X
    0.6750-0.0005-0.07%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg