RBA props up Aussie dollar again, shares slide: Economy roundup

The poor old Aussie dollar continues to take a battering, thanks mainly to falling commodity prices, which have also affected the dollar.

The poor old Aussie dollar continues to take a battering, thanks mainly to falling commodity prices, which have also affected the dollar.

For the third day in a row, the Reserve Bank has intervened by “providing liquidity” to help prop up the dollar on European markets overnight.

The dollar hit a five-and-a-half-year low at US60.25¢ on Friday, prompting urgent action from the RBA. The dollar has gained little ground since, trading at US60.53¢ at 11.45am AEST.

The sharemarket has also had another disappointing morning, with the benchmark S&P/ASX200 index falling by 1.65% in early trade. The index was down 1.7% or 64.7 points to be at 3744.5 points at noon AEST.

The US sharemarket fell to its lowest point in more than five years overnight, following plunging markets in Europe.

The Dow Jones Industrial Average fell 2.42% to 8175.77 points, the lowest level since April 2003. The Dow has currently lost 25% for the month, and if that number remains until Sunday, will be the biggest monthly drop since September 1931.

European sharemarkets also fell to five year lows. The benchmark FTSEurofirst 300 index closed at 816.04 points, down 1.65%, its lowest point since May 2003.

In corporate news this morning, British energy giant BG Group has made a $5.6 billion takeover bid for Queensland Gas Company, sparking an incredible 79.68% rise in shares from $2.55 to $5.75 after the announcement.

As part of the deal, BG will also purchase AGL Energy’s stake in QGC. Shares in AGL also rose 4.55% from $13.40 to $14.01.

Meanwhile, Becton Property Group has begun a “formal due diligence process,” with a number of businesses interested in either purchasing or recapitalising the group. In a statement to the ASX, Becton says it is aiming to strengthen its capital structure and rebalance its net value to its trading market price.

“We advise that a formal due diligence process has commenced with several interested parties to advance the proposals,” Becton says.

But the company’s founder, millionaire Max Beck, says he is not interested in buying company.