Chief currency strategist at the Commonwealth Bank Richard Grace believes that the increase in US dollar swap lines to unlimited amounts will have the short-term effect of causing a rally in the Aussie dollar.

But he says the fundamentals suggest an Aussie dollar below US65c in the medium term.

He said that the increasing of swap lines will alleviate the short-term demand for the US dollar, allowing it to ease, which could see a rally in the Aussie dollar back up to US75.2c.

The dollar has been priced in the relief rallies which have hit markets on occasions this week, as opposed to previously when it has been priced in a global panic, according to Mr Grace.

However, he believed it was likely the rally would run out of steam once the impact of likely recession in the US, Europe and Japan took effect.

He suggests there is the medium-term risk that the AUD falls to USD0.6445, with a possible re-test of the 11 October low of USD0.6330.

The news is good for grain exporters – who will see Australian exports become more competitive on the international market.

AWB spokesman Peter McBride said the depreciation of the Australian dollar was a postive for Australian exports and good news for wheat farmers look to market this year's wheat harvest.

However, he warned that the devaluing of the dollar had not offset the recent slump in US wheat futures and global wheat prices.

The other negative impact of the dollar’s devaluation will be the rise in the cost of imported inputs in real terms – although key inputs such as oil have also dropped in valuing, negating the change in exchange rates.