Dollar falls

dollar,silver,coin,money,currencyThe Australian dollar briefly fell to a two week low after the European Central announced its 60 billion euros ($A84.62 billion) a month economic stimulus plan.

At 0700 AEDT on Friday, the local unit was trading at 80.59 US cents, down from 80.66 cents on Thursday.

Early on Friday morning it fell as low as 80.54 US cents, its weakest level since January 7.

The ECB’s bond buying program was only slightly larger than the 50 billion euros a month predicted in some reports on Thursday morning.

The combined monthly purchases of public and private sector securities will be carried out until the end of September 2016, ECB president Mario Draghi said.

NAB head of research, UK/Europe Nick Parsons said the reason why the Australian dollar didn’t react to the ECB decision is because Draghi did what was expected.

“Our central expectation going in to the ECB meeting was that President Draghi would try to exceed expectations,” Parsons said.

“He is a past master of this, very skilled at manipulating opinion and then over delivering.”

Parsons doesn’t expect the Australian dollar to fall below 80 US cents ahead of the Australia day long weekend.

“As the country gears up for its official national day on January 26th, we’d expect the current low of this cycle, 80.33 US cents to hold today,” he said.

AAP

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