The Australian dollar took a heavy beating on Tuesday and fell below $1.01 versus the greenback which also happens to its lowest since December. Investors squared off their positions on the Australian unit in reaction to weak Australian trade data and escalating worries over European debt.

According to the latest report Australian trade deficit reached the figure of 1.59 billion Australian dollars in March as compared to 754 million Australian dollar in February. Australian government also announced sharp reductions in 2012-13 budget.

The Australian dollar fell to 1.0126 against the US dollar on Tuesday as compared to 1.0201 on Monday’s North American trading session. The pair AUD/USD touched its intraday low of $1.0087 which is the lowest since December 21^st, 2011. Analysts think that the pair AUD/USD would find support anywhere around $0.95

Reserve Bank of Australia recently went for easing measures and reduced its key interest rate give boost to the economy. However many analysts are of the opinion that RBA’s move may not be done due to the recent trade deficit figure.

Investors were also concerned over the inability of the political parties to form a government in Greece and many questioned the economic and political stability in the single currency region. This also resulted in weakness of the euro against its major rivals. The greenback benefited the most and has been gaining against its major rivals for the longest since the credit crisis in 2008.