Australian dollar’s value versus US Dollars have fallen 13.7% from $1AUD = 94.8 US cents last July 2014 to 81.8 US cents by the end of 2014.
Australian dollar is part of the top 5 most traded currencies in the world, just behind USD, Euro, Japanese Yen and British Pounds.
The Australian dollar is popular due to relatively high interest rate, the country’s stability on its economy and political system and a close exposure to the Asian markets.
The Australian dollar has fluctuated wildly since 1983. It hit a record all time high last May 2011 at $1AUD = $1.10 USD and a record low last March of 2001 when it plummeted down to 48 US Cents.
When markets change, there will always be people who are happy and un-happy about it.
UNHAPPY GROUP :
- Australian residents who want to send funds overseas : A lot of Australian residents are here on a work visa and religiously still sends money back “home” for their families or their individual savings. When the Australian dollar is low, the amount of foreign currency in can buy is small. Filipinos for example are now only getting 34 Pesos for every Australian dollar when it used to be 41 pesos around middle of 2014.
- Consumers who buys exported products . When AUD is low, the cost for imported products increases.
- Companies Outsourcing Overseas. There are a lot of Australian companies who have outsourced a part of their business overseas, to the Philippines, Thailand or even the USA. When Australian dollar is weak, the overhead of these companies will substantially rise.
HAPPY GROUP :
- Australian Retailers : When imported products are “pricier” , the locally made products by Australia retailers gets more competitive in the market
- Australian Exporters : revenues earned overseas are now of higher value in terms of AUD
- Australian Tourism: It will be cheaper for tourist to visit Australia
- Education Providers: Schools in Australia will be more competitively priced for foreign students. This can increase number of enrolments of overseas students.
Wether you are part of the happy or unhappy group, it is still a good thing to be holding an Australian dollar.