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Aussie Dollar Plummets To 10-Year Low On U.S. Exchange Rates

Australia's record exports could reach new heights after the dollar hit a 10-year low against the US dollar.

New Zealand's Reserve Bank cut its official interest rate from 1.5 per cent to one per cent on Wednesday, causing the Aussie dollar to tumble on currency markets.

Shortly after lunch, the Australian dollar was worth 66.90 US cents, just above what had been its lowest level since March 18, 2009.

It comes after data revealed on Tuesday shows Australia's trade surplus has reached a record $8 billion, thanks to strong demand from China and weak import demand domestically.

The lower Aussie dollar will make Australian exports even cheaper overseas, but it also means imports will be more expensive.

"The relatively low dollar and high iron ore prices are pumping up our exports but our domestic economy is still soft," Labor's shadow treasurer Jim Chalmers told AAP on Wednesday.

"Despite record low interest rates, tax cuts and an accommodating dollar the economy is floundering under the Liberals."

Photo: AAP

READ MORE: Panic As America-China Trade War Sparks Major Market Decline

The latest economic data shows housing approvals have dropped significantly since last year, inflation and wage growth are stagnant, and the Reserve Bank of Australia is flagging more interest rate cuts before the end of the year.

Economists and businesses want the government to inject more money into the economy by raising Newstart and bringing forward infrastructure spending, but so far the coalition has rejected those calls.

Feature Photo: Sean Callow