The dollar fell through $0.66, due largely to our position as a major exporter of commodities, leaving Australia exposed.
The Australian share market is expected to decline when it opens this week due to fears coronavirus is spreading across Asia and will increasingly impact global economic activity.
United States and European markets fell on Friday on the back of increasing concerns over COVID-19 as more companies face disruptions and issue profit warnings.
“People are increasingly concerned about the number of cases outside of China particularly in places like Korea and Japan,” AMP Capital chief economist Shane Oliver told AAP.
“There’s a concern that if there are more cases in Asia that will further hit global economic activity.” The Dow Jones fell 227.6 points or 0.8 per cent at the close on Friday and the S & P 500 declined 1.1 per cent while European shares shed 0.6 per cent. As a result futures trading in Australia has declined 47 points or 0.7 per cent. Dr Oliver expects the local market will open down more than 40 points on Monday after hitting a record high on Thursday despite the global jitters over COVID-19.
Local construction data out on Wednesday for the December quarter will probably show a fall, the economist predicts.
Business investment figures to be released on Thursday are more likely to be mixed but still soft overall.
Both sets of figures will be watched closely because they’ll suggest how GDP performed in the December quarter.
Credit data published on Friday could be boosted by the pick-up in housing lending.
Reporting season continues domestically with Rio Tinto and Woolworths among those to reveal their earnings this week.
Dr Oliver says if the results are better than feared it could again help support the Australian market.
The benchmark S & P/ASX 200 index closed 0.3 per cent lower at 7,139 on Friday but recorded its third weekly gain benefiting from company earnings and domestic expectations for monetary stimulus.