Australian dollar drops below US75¢ as rate hike prospects fade

The Australian dollar fell, surrendering to a rally in the greenback as well as signs that the timing of a local interest rate hike has been pushed further into the future and a signal from the Reserve Bank that a weaker currency wouldn't necessarily be a negative.

The currency slid as low as US74.73¢ overnight, a level at which AxiTrader chief market strategist Greg McKenna yesterday said could put "acute pressure" on the Aussie: "That's especially the case if US74.75/80¢ gives way. Then we'll potentially see the cascade lower to US73.30¢, and perhaps into the US71¢ region.

"Unless things change, the chances of a run under US70¢ are growing materially," Mr McKenna also said.