Us v aud dollar1/18/2024 Mr Franulovich said Australian businesses such as Mr O'Brien's are getting a double benefit. "We actually do see the benefit of the dropping dollar because that means more AUD through the sales than US dollars," he explained. Selling in US dollars means Mr O'Brien's company is reaping the benefit of the higher exchange rate too. It's a different story for exports in USDĪirPhysio makes its devices at Tweed Heads and ships them to 100 countries globally, with most of that trade also done in US dollars. "We're hoping the pound becomes stronger and we can gain that back at the end of the year," Ms Mellor said. However, Ms Mellor is playing the long game and hopes the UK currency will turn in the favour of Australian businesses exporting to that market. "So we're making less, which is not something that we imagined." So, with the currency the way that it is, it's hurt the cost that they're buying it from us for. ![]() "We signed on with a distributor about three months ago and we set our pricing for the entire year. "The pound has definitely hurt us," she said. "We've been waiting to launch into the UK for a really long time now," founder and chief executive officer Ally Mellor said, after returning from the UK on Friday. The Sydney-based business makes high-protein snacks and drink powders. It wasn't the best timing for Australian business Locako to launch into the UK. This week, Prime Minister Liz Truss has also backtracked on the tax cuts. agreed to buy UK gilts in whatever amounts necessary to stabilise the UK bond market and the interest rate markets there." "Now the Bank of England has intervened and provided a bit of a backstop. ![]() "Markets there were questioning the fiscal credibility of the UK authorities and that sent the pound reeling and interest rates soaring there last week," Mr Franulovich explained. That extra stimulus in the economy would have counteracted the Bank of England's measures to try to slow the rate of inflation. The UK is on the buying end of those higher commodity prices, with Europe in the grips of an energy crisis.Īlready struggling in poor economic conditions, the British pound went into freefall last week after the UK government announced tax cuts for higher earners that were to be funded by borrowings. The pound is down about 17 per cent," Mr Franulovich said.Ĭommodity prices for our biggest exports - such as iron ore, coal and gas - are still elevated, and that's what's giving our currency strength in the global market. "Other currencies have fared a lot worse. ![]() They are seeing their currencies fall while ours is stronger against them. Some of our other trading partners are having a much rougher time of it than Australia. "And now, while there's a little bit of a respite on the freight front, that's sort have been evaporated by this fall in the currency."Īussie dollar is higher against other currencies "Our members in the importing community have had a really rough three years - they've had COVID-related supply chain crises, that flows into sky high shipping rates, and also our biosecurity agency is quite chronically challenged. "When the Aussie dollar falls against the US dollar, imports become significantly more expensive for importers and, by extension, businesses and consumers," Sal Milici from the Alliance told The Business. The Freight and Trade Alliance warns the high US dollar could have ramifications for local consumers too. "The US dollar has been strong across the board this year and the Aussie dollar has not been immune, it's down about 11 per cent." "It's been a case of all systems go for the US dollar," said Westpac's head of a foreign exchange strategy, Richard Franulovich. "You're talking about $20,000 to $23,000 difference in a payment that might happen each week or every month."
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