Fall in Aussie Dollar to Help the Non-Resources Sectors

23 Sep 11

Media reports this morning are moaning about the fall in the aussie dollar, but this can only help the embattled manufacturing sector that employs over 1 million workers.

The Australian dollar dropped sharply overnight by more than two-and-a-half cents as the World Bank warned of a global crisis on the horizon.

At 4am (AEST) today, the dollar was quoted at 97.51 US cents, more than two-and-a-half cents down from last night's 5pm close of 100.18 US cents.

This comes after World Bank president Robert Zoellick said advanced countries needed to act quickly to resolve their crises before they ravage the rest of the global economy.

"Europe, Japan and the United States must act to address their big economic problems before they become bigger problems for the rest of the world," he said at the opening of the World Bank-International Monetary Fund annual meetings in Washington today.

He said he still believed that a return to recession in the US, Europe and Japan is "unlikely".

On the back of global rumblings, the Australian sharemarket took a dive to its lowest level in more than two years. More than $30 billion was wiped off the market yesterday with the index dropping 2.6 per cent to 3964 points its lowest closing point since July 2009

Resource and financial stocks were among the hardest hit, with fears of a slowdown in China sending mining giant Rio Tinto down 7 per cent while BHP Billiton lost 4 per cent.

The world bank has called on governments the world over to act responsibly to stave off any potential global crisis and cites the many who said they did not see the GFC coming in 2008, that they have no excuses now.

Is the Australian government acting responsibly in a time of global economic turmoil, by seemingly ignoring the plight of Australia's manufacturing sector and also introducing an untimely and unwanted carbon tax. It would appear from all the recent media reports and a possible slowdown in China that the Australian two speed economy is too reliant on the resources sector.

Whilst some will moan about the fall of the Australian dollar making online shopping and overseas holidays not so attractive, it can only benefit the ailing manufacturing and tourism sectors.