The Prime Minister, Kevin Rudd, has attacked as ''reckless'' suggestions that the proposed mining tax is driving down the Australian dollar. Hitting back yesterday at claims by the opposition and some market analysts, Mr Rudd said the crisis of confidence in Europe was hitting currency markets and equities markets ''right across the world''. ''If you look at the adjustments which have occurred in the last 24 hours to the Australian equities index in general, the adjustment in the minerals index is less than occurred in the overall stockmarket index.'' In recent days, the opposition has highlighted the impact on retirement savings of falling share prices in the mining sector. Yesterday the shadow treasurer, Joe Hockey, was in Perth supporting miners and attributing the falling dollar and declining investment in Australia to the tax. The government was backed yesterday by Deutsche Bank in its research report: ''Some commentators have suggested the Australian government's proposed resource tax has raised the risk of investing in Australia and thus contributed to the fall. ''We struggle to see any merit in this explanation given the massive regulatory and tax changes ahead in many parts of the developed world.'' AMP's chief economist Shane Oliver backed the Opposition's view: "The impact on Australian shares and the dollar has been magnified by concerns around the planned [resource tax]." At the close of trading yesterday, the dollar had recovered slightly to US83¢. Mining stocks were down slightly. Government insiders said this showed it was wrong to correlate the falling dollar with the mining tax.

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