At 0700 AEDT on Wednesday, the local unit was trading at 79.36 US cents, down from 79.42 cents on Tuesday.
Westpac senior market strategist, Imre Speizer, said jitters about the policies of the new Greek government and weak US data gave traders reason to be pessimistic. Syriza, which won Sunday’s general election in Greece, wants to renegotiate its bailout package and opposes the austerity measures that are linked to the package.
“Sentiment soured overnight. European equities were lower, the Eurostoxx 50 closing down 1.2 per cent and Greek equities were down 8.7 per cent in the wake of the weekend election,” Speizer said. “US durable goods data disappointed, as did some key company earnings reports, raising questions about US growth.”
US durable goods orders fell for a fourth consecutive month, down 3.6 per cent in December, led by a decline in aircraft orders.
Speizer expects the Australian dollar to fall further in the coming months with 77 US cents possible. “Low Australian interest rates and commodity prices, and a strong US dollar, should continue to weigh on the Australian dollar during the next few months,” he said.
On Wednesday, all eyes will be focused on the release of December quarter inflation figures, which are expected to be below the Reserve Bank of Australia’s two to three per cent target band.