Few would have thought a year ago the Australian dollar, which was barely 5 cents from parity with the greenback, would be trading at US70¢ but on Wednesday it plunged lower to reach a six-year low.
The local currency has been sliding steadily for a year now, a trend that accelerated in the last few months as China's slowing growth hit key Australian exports such as iron ore and coal.
"It's on its way to 60 cents," AMP chief economist Shane Oliver said.
"The Aussie is a volatile currency but the broader trend is downwards. We've got to US70 cents earlier than we thought, and it's got a lot further to go."
This time last year, the Australian dollar was fetching US93.5¢, compared to Wednesday's low of US69.78¢.
The catalyst was a crescendo of concerns around China's flagging economy and hence its demand for our key commodities such as iron ore, which makes up $1 in every $5 of Australian exports.
These concerns were highlighted when the Australian Bureau of Statistics released data that showed Australia's economy expanded by a miserly 0.2 per cent over three months to June.
This was half of what analysts and economists were forecasting for the same period, and significantly lower than the preceding quarter when the economy grew 0.9 per cent between January and March.
"The falling dollar is largely in response to concerns about China," Mr Oliver said.
"Commodity prices are down, global growth is soft and locally we've got this problem that non-mining economic activity has picked up but not enough to offset the slump in mining activity. These problems will be with us for years to come."
The dollar slid more than 1 per cent on Tuesday night after China's official factory gauge reported a contraction in activity, sparking renewed pessimism in demand for commodities and sent markets in a tailspin.
The Australian currency is notoriously volatile, similar to the currencies of fellow commodity-reliant economies of Canada and New Zealand, which have also been hammered this year.
The dollar returned to US70.3¢ into late trade but its double drop below US70¢ will have many analysts reconsidering as most were forecasting it would reach this range by the end of the year.
Mr Oliver said he expects the dollar to reach US68¢ by the end of the year and slide to US60¢ throughout 2016.
The dollar's wobbles over the last month, which saw it drop out of its trading range of US73¢ to US71¢, were also in response to significant share market volatility that began in China but spread worldwide.
"Things really aren't getting better," National Australia Bank senior currency strategist Emma Lawson said.
"The circular theme of the markets continues, with equities weakening, weighing on broader risk, weighing on currencies, weighing on equities."
An upcoming US interest rate rise, the first in almost a decade, is also expected to contribute to the global currency volatility.
Global equity markets were hit overnight on Tuesday, following the S&P/ASX 200 which closed Tuesday down 2.1 per cent. The Dow Jones Industrial Average fell 2.8 per cent, the S&P500 shed 2.9 per cent and the Nasdaq Composite fell 2.9 per cent. European markets also fell, with the FTSE 100 down 3 per cent and the DAX down 2.4 per cent.
