The Australian dollar hit US94.3c overnight as the US dollar fell on Federal Reserve chairman Ben Bernanke’s comments that the economy was still suffering from the sub-prime fall-out and that the central bank would slash interest rates further if needed.
The strong Australian dollar has been the reason why a number of resource stocks have posted lower financial results of late, with the likes of Oxiana and Zinifex referring to the negative effects of a strong dollar on their bottom lines.
On the local bourse, the S&P-ASX 200 index fell 116 points to close at 5651.2, while the All Ordinaries ended the session down 96.4 points at 5746.1 on the prospect of a further interest rate rise by the Reserve Bank of Australia next week.
The major miners were weaker despite firmer base metal prices with BHP Billiton closing today’s session A25c lower at $39.60, while its takeover target Rio Tinto ended the day 83c lower at $135.37.
BHP today confirmed workers at its nickel operation in Colombia are on strike, with a company spokesperson telling Dow Jones newswires that it was unknown how long production at the nickel mine and smelter would be affected.
Trade union vice president Carlos Barroso said the strike may last for up to two months, but he expected the union and the company to reach an agreement sooner than that.
The news caused London Metal Exchange nickel prices to rally, with the metal’s three-month price last up $US590 on overnight close to $29,790 per tonne.
LME three-month copper was last trading at $8460/t, up $30 on overnight close, while aluminum was unchanged at $3090/t.
On the precious metals front, spot gold was last trading down $3 to $954.5 an ounce.
Constantinople Advisors president and market analyst John Mesrobian told the newswire that he expected the gold price would hit $1000/oz over the next few weeks if not sooner and reach $1200/oz some time this year.
Movers and shakers at the big end of town were few and far between, with zinc miner Zinifex one of only a handful of miners on the Final Call watchlist making any gains, closing the day 52c higher at $10.52.
The biggest mover by percentage on the watchlist was South Boulder Mines which closed the day 7c higher at 21c after announcing it had started reviewing the potash potential at its wholly-owned Lake Disappointment East project in Western Australia.
