Posted by 
Australians travelling overseas can't help notice how weak the dollar currently is compared with other major currencies, but there is a warning it could plunge to a record-low 40 US cents in coming years.
David Llewellyn-Smith, chief economist at MB Super and Nucleus Wealth, said a global recession would see the Aussie dollar tumbling to the nightmare mark within five years.
He told 9news.com.au the uncertain future facing China's economy had major implications for Australia and its currency.
READ MORE: China's July exports tumble by double digits, adding to pressure to shore up flagging economy
Sluggish Chinese growth could mean a dip in demand for Australian iron ore – the commodity used in steel making – and put a brake on the Aussie dollar.
"China has stopped growing fast … Its property and infrastructure debt bubbles are bursting," Llewellyn-Smith said.
He said global conditions today are comparable with what happened in Japan during the 1990s, when the powerhouse economy entered a sharp dip after decades of growth
"There are very strong parallels between Japan in the late 1980s and China today," he said.
The Japanese economy consumed large amounts of iron ore in the 1990s and became a superpower before a sharp and long decline.
And the ripple effect was felt across the globe, including Australia where the local currency dipped to just 50 cents against the US dollar.
READ MORE: Food dehydrator tested in mushroom poisoning investigation
If the Australian dollar tumbled to 40 US cents, it would break its current record low since it was floated at 47.8 US cents in April 2001.
Llewellyn-Smith also highlighted similarities between the current boom in artificial intelligence companies and the tech revolution of the 1990s, forecasting the giant US economy would flourish in the years ahead.
"Their technology firms gained global leadership with the rise of the internet, driving American economic production."
He said a booming US economy would inevitably push the greenback up, heaping more pressure on the Australian currency.
Llewellyn-Smith stressed he was making a long-term forecast and a decline in the dollar would bring economic benefits.
'This is the next five to ten years, over the next business cycle," he said.
While overseas holidays would become more expensive with a weaker dollar, more Aussies could opt for a domestic holiday, boosting the local tourism industry.
And the price of imported goods would be cheaper for Australians.
Sign up here to receive our daily newsletters and breaking news alerts, sent straight to your inbox.
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
