Australian dollar dips below parity with greenback

The Australian dollar dropped below parity with the greenback on Monday for the first time since December as political turmoil in Greece led traders to sell riskier assets.

At 1224 (0224 GMT), the "Aussie" hit 99.99 US cents, down from 100.14 cents at the start of trade, although it recovered to inch back to 100.04 late in the session.

The currency last dipped below parity with the US dollar in December after United States Federal Reserve left interest rates near zero, coupled with concerns about Greece.

Analysts said the latest drop was down to investors returning their money to safe-haven currencies amid fears Greece will exit the eurozone.

"This issue in Greece is really weighing on the market at the moment," Easy Forex senior currency dealer Francisco Solar said.

Emergency talks in Greece to form a coalition government were expected to continue Monday in a bid to avert a repeat ballot after inconclusive elections a week ago.

However, the head of a small moderate leftist party seen as the last hope for a coalition said ahead of the talks that there was no hope of a Greek unity government being formed.

"It's unprecedented, we really don't know what the implications of a country being ousted from a monetary union are," said Solar.

"So at the moment markets are pretty jittery."

Australia's commodities boom and relatively high interest rates over the past two years saw the Aussie soar past parity, hitting a record of 110.81 cents in July 2011.

It only retreated significantly after Japan's March 11 earthquake-tsunami and a downgrade of the United States' debt rating by Standard & Poor's.

Canberra has previously warned that the Aussie is likely to remain at a high level for years as it comes to be seen as a safe bet amid global turmoil.

But the strong dollar -- which first breached parity with the greenback in October 2010 -- is squeezing some local industries, with tourism, manufacturing and education exports particularly hard-hit.

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