The Australian dollar is set to drop by 0.2 per cent to $US7.10 per Australian, according to data from the Australian Bureau of Statistics.
The move will be welcomed by investors, with the national currency set to be among the strongest performers in the past month.
As part of its monetary stimulus program, the Federal Government announced the $15 million cash injection for the Australian dollar over the next week.
Analysts are predicting the move will drive the currency higher, but that is expected to be offset by the drop in the Australian rand.
“The Australian dollar will probably end the week up at around $US8, but the next few weeks could see a significant pullback, with a 1 per cent swing on the dollar’s strength, which would put the national dollar well in the red,” said Paul Rolfe, an economist at Capital Economics.
Economists expect the national exchange rate to fall further as the Federal Reserve starts to cut interest rates, but also say it could be the difference between keeping interest rates at current levels or raising them.
However, Mr Rolfo expects the Australian economy to bounce back in the coming weeks, with unemployment expected to decline, and wages rising.
Australia’s dollar fell to a two-month low against the greenback on Thursday, as the Government announced it had decided to inject $15.3 million into the economy.
It is understood the funding will go towards job creation, including the creation of 1,200 new jobs.
Prime Minister Scott Morrison said the Government was confident in its decision and that the Government would be spending the money responsibly, despite the uncertainty around the Reserve Bank’s next policy decision.
Mr Morrison said it was important to focus on job creation and not the impact on the currency.
Treasurer Scott Morrison on the impact of the Federal Budget on the Australian currency.
Source: ABC News | Duration: 3min 0secTopics:economy,government-and-politics,government—public-sector,government,budget,economics-and%E2%80%99-economics,world-politics