The dollar had soared into the high 90s against the US dollar in recent months, prompting forecasts of price parity.

While great news for importers, the strength of the dollar severely hampered the terms of trade for exporters of agricultural produce.

But the on-going gloomy economic outlook is taking its toll on the currency market, with the dollar sliding against the US dollar, the Japanese yen and the British pound today.

The prospect of interest rate cuts and the strengthening US dollar are encouraging traders to sell the Aussie dollar and invest elsewhere.