The Australian dollar is lower as investors flock to safe haven currencies and assets amid concerns about the health of the Chinese economy.
At 1200 AEDT on Tuesday, the currency was trading at 71.94 US cents, down from 72.17 cents on Monday.
Early in on Tuesday morning it fell as low as 71.56 US cents its weakest level since December 21.
The Aussie's decline came after the release of the Caixin/Markit China manufacturing index on Monday that showed that China's factory activity contracted for a 10th straight month in December.
Share markets around the world lost significant ground on Monday, with the Shanghai market losing seven per cent before closing early.
At 1025 AEDT, the benchmark S&P/ASX200 index was down 1.11 per cent as investors reduce risk ahead of the resumption of trade in mainland China later Tuesday.
Chinese shares dropped seven per cent on Monday before trade was suspended, and the gloom spread around the world with New York, London, Paris and Frankfurt all finishing the day sharply down.
"It does look like we will remain under pressure," CMC Markets chief market strategist Michael McCarthy said.
"That weakening Aussie dollar is a positive, as is the continuing rise in iron ore, but I suspect in this global wave of weak sentiment those factors will be ignored and instead the key factor for today will be the performance of the markets in Shanghai and Shenzhen."
Those markets open at 1230 AEDT.
The big four banks led the Australian market lower, with ANZ declining 42 cents, or 1.53 per cent, to $27.11. Commonwealth Bank was down $1.20, or 1.42 per cent, to $83.26, NAB was down 37 cents, or 1.24 per cent, to $29.48, and Westpac was down 37 cents, or 1.12 per cent, to $32.63.
Mining giant Rio Tinto declined 65 cents, or 1.46 per cent, to $43.98, while BHP Billiton dropped eight cents, or 0.45 per cent, to $17.72.
The energy sector was another loser, with Origin down 13 cents, or 2.65 per cent, to $4.77.
Electronics retailer Harvey Norman looks to have benefited from the continued travails of competitor Dick Smith, which went into voluntary administration on Tuesday.
Against the backdrop of a falling market, Harvey Norman was up 0.5 cents, or 0.12 per cent, to $4.345, while JB Hi-Fi was down just seven cents, 0.35 per cent, to $20.17.
Key facts:
- At 1200 AEDT, the benchmark S&P/ASX200 index was down 60.5 points, or 1.15 per cent, at 5,210.0 points.
- The broader All Ordinaries index was down 59.1 points, or 1.1 per cent, at 5,263.7 points.
- The March share price index futures contract was down 80 points at 5,172 points, with 20,751 contracts traded.
- At 1204 AEDT, national turnover was 729.5 million securities worth $1.3 billion.
- National turnover was 281 million securities traded worth $400 million.
