With the Reserve Bank of Australia (RBA) leaving the door open to further rate cuts, the only way forward for the Australian dollar is down, say strategists.
The Aussie plunged 1.9 percent against the U.S. dollar to $0.7655 on Tuesday after the central bank cut its benchmark cash rate by 25 basis points to a fresh record low of 2.25 percent. It was the currency's biggest once-day loss since mid-2013, according to Reuters.
"75 cents seems the natural progression point from here – I would expect that over the next two weeks if not sooner," Jonathan Cavenagh, a currency strategist at Westpac told CNBC.
"Beyond that, we'll see how things unfold. If we see another rate cut, the Aussie could definitely be trading in the low-70 cent range," he said.
The central bank struck a dovish tone in its policy statement highlighting below-trend growth and weak domestic demand in the economy, giving rise to expectations of additional easing. It also said the Aussie remained above fundamental value and that a lower exchange rate is needed to achieve balanced growth.
In December, RBA Governor Glenn Stevens told local media that he would prefer to see the currency at $0.75 – levels not seen since early 2009.