The Australian dollar threatened to break its four and a half year low after oil and gold prices fell at the end of last week.

At 0700 AEDT on Monday, the local unit was trading at 82.35 US cents, down from 82.72 cents on Friday.

Early on Saturday morning, Australian time, it dropped as low as 82.29 US cents, which is near the four and a half year low of 82.15 US cents, reached last week.

last week, oil prices tumbled below $US60 a barrel for the first time since July 2009 after the International Energy Agency cut its oil demand forecast for 2015.

National Australia Bank senior economist, David de Garis, said the fall caused commodity currencies like the Australian dollar to fall against the US dollar while stock markets were also weaker.

“The Norwegian Krone and the Canadian dollar sat at the bottom of the major currency leader board,” he said.

“The New Zealand dollar and the Australian dollar were close behind.”

The key focus for local markets on Monday will be the release of the federal government’s mid-year economic and fiscal outlook, which is expected to show that the budget deficit has blown out to $35 billion.

AAP