US President Obama's Re-election Drops Aussie Dollar

Worries over the future of the United States’ economy caused investors to dump stocks after the announcement of President Barack Obama’s re-election, causing the Euro to drop and sending the Australian dollar down by nearly half a US cent in value.

According to the Sydney Morning Herald this morning, the Aussie dollar is trading at $US1.0416, down from $US1.0463 yesterday due to the rapid stock purge.

According to financial experts, President Obama has a mighty task at the top of his docket: avoiding another recession.

"While Americans are excited about having President Obama for a second term, his policies are less business-friendly and would hurt the financial markets more than help it, due to the prospect of higher taxes," BK Asset Management managing director Kathy Lien told the SMH.

Ms Lien pointed out that the President has an uphill battle ahead with the ‘fiscal cliff’ – the expiry of tax and spending cuts due at the end of the year – that would total approximately US$700 billion and could push the US back into an economic slump if President Obama and Congress do not reach an agreement, the New York Times reported.

"The president's first task will be to deal with the fiscal cliff and it won't be made any easier with Republicans continuing to control the House and Democrats controlling the Senate," she said.