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Thursday, May 31, 2012

Shares dip, dollar extends losses

The Australian share market has dipped and the dollar has fallen to a six-month low against the greenback amid fears Spain may need a bailout.

The All Ordinaries lost 15 points to 4,134 and the ASX 200 ended down 18 points to 4,076, well off session lows.

A rough night on global financial markets saw investors pile into the US dollar for safety, after Spain asked the European Central Bank to bail-out Bankia, one of the country's largest banks.

The request was rejected, and global markets and the Australian dollar fell.

Westpac senior currency strategist Sean Callow says the dollar extended its fall through the day as local news added to investor concerns.

"Locally we've also had some comments from the secretary of Treasury Martin Parkinson, who is talking about plenty of scope for monetary easing if needed in Australia, so obviously with the Reserve Bank meeting next week people are speculating on another rate cut," Mr Parkinson said.

A short time ago the dollar was buying 96.9 US cents, its lowest level since late November last year, and down almost 2 cents in as many days.

The dollar is down more than 9 per cent in the last three months. Read More