The Australian dollar fell sharply against the greenback on Monday as the Federal Budget delivered more pain for the economy.

Key points:The Reserve Bank announced the first decline in the country’s inflation target in six monthsOn the front pages of newspapers the news was greeted with shock and outrage, with the Australian dollar falling to a record low of 96.90 US cents after the Government announced the Reserve Bank would start to gradually trim its inflation target.

“It was a shock to many,” Mr Bowen said.

“There was a lot of anxiety around the dollar, especially after the Treasurer’s speech on Monday morning and we’ll be seeing more of that.”

Key pointsAbbott’s budget unveiled measures to boost investment and to ease pressure on the economyMr Bowen said it was a “tough day” for the nationMr Bowen also confirmed the Reserve Banks central interest rate would stay at 2.5 per cent for another two yearsThe Federal Government is expected to spend a record $9.6 billion on infrastructure over the next three years, with Mr Bowen saying the Government was aiming to have the nation’s roads, bridges and airports operating at 90 per cent of capacity by 2020.

“The Government’s spending is going to be a tough day for the Australian economy, but it’s also going to make it easier to get our economy moving again,” Mr Abbott said.

Mr Bowen’s comments followed the release of a budget forecast for the first time in six years that predicted growth in the economy would average 1.3 per cent a year.

The Government also announced measures to lift investment, including an extra $500 million over four years to support job creation.

“These are important reforms and will ensure that the Australian workforce has a strong base to rebuild from,” Mr Bowen said.

The Australian dollar dropped to a low of 100.92 US cents in New York at 9:10am (AEST) after the Reserve banks announcement.

The dollar index rose 0.1 per cent against the Australian greenback.

The currency fell to an all-time low of 93.94 US cents on Monday after the Federal Government’s budget.

Topics:government-and-politics,economy,budget,economics-and‑finance,australia,federal—state-issues,state-parliament,business-economics,government-services,wealthy-aboriginal-andamp;united-statesFirst posted February 20, 2019 16:10:56Contact Josh Schmall at [email protected]