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  • #978400
    DANKS
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    So the million dollar questions.. as an importer/distributor forcasting the AUD is a biggy for me…

    Whats every one thoughts on where the the dollar is heading? will it hang around parity or will it be weakening any time soon?

    #1106796
    MyGreatIdea
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    I don’t worry about things I can’t control…but I do my costings, cash flow forecast and budget all based on the dollar equalling USD0.85. I think if it drops below this for any length of time then we’ll have bigger things to worry about anyway lol

    Wendy :)

    #1106797
    DANKS
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    Wendy,

    Im the same .85cents is my magic figure….

    Still curious to see where its headed :)

    Wish i had a bloody crystall ball to look into…

    #1106798
    TehCamel
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    personally, I’d love to see us go the other way against the pound for a bit. Somewhere around 0.8 instead of 0.6 would be nice…. :)

    (i have a UK based client.. I’m happy with the rate I accepted knowing the FX rate at the time, obviously I’m more than happy if it goes the other way..)

    #1106799
    T J Madigan
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    This could be a strong indication of where we are headed:
    http://finance.ninemsn.com.au/newsbusiness/8478314/six-month-low-for-australian-shares

    NWO proponents would like nothing better than world economic collapse. That’s why they’re trying so hard to collapse the U.S. and European economies.

    #1106800
    DANKS
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    now things are cooking.. ive killed many of hours discussing the “NWO” theories.. love it!!

    #1106801
    Uncomplicating
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    DAN_KOL, post: 118518 wrote:
    So the million dollar questions.. as an importer/distributor forcasting the AUD is a biggy for me…

    Whats every one thoughts on where the the dollar is heading? will it hang around parity or will it be weakening any time soon?

    In 2003 I was at the SCG watching The Ashes and listening to my fellow Poms in the bleachers singing “We get $3 to the pound”

    AUD has doubled in value since then, but not until 2009 did it take a big leap: right about the time the credit crunch bit.

    At some point in the future, confidence will increase and AUD will big to fall as it won’t look anywhere near as good. Falling interest rates won’t help either.

    Here’s the AUD history for the last 20 years. Sobering reading for those hoping to maintain what can only be an artificial high caused by everyone looking comparatively terrible.

    #1106802
    marketingweb
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    I think what figure you come up with in terms of how much you hedge depends on how you buy and use stock etc.

    For example – a business i’m doing some consulting for imports product pretty much “to order”, and are in a pretty competitive industry so can’t load up the price too much for currency fluctuations. Each job is quoted, then when the quote is accepted the stock is ordered on behalf of the client. Thus the time between costing and final payment to China is 4 months at the MOST – but generally more like 2 months in the majority of cases, and a repeat order in the future would be recosted at the current rates. In this situation you need to only think about where the dollar could go within that time period, taking into considering your risk profile (ie “are you a gambling man”). For these scenario’s the business is costing things at around 92c currently.

    However in a situation that I imagine you would be in CoupleIT, you may be not only ordering in stock, but also having to set a wholesale price of your product (an maybe an RRP) that will be firm for 6 to 12 months I suspect, as well as holding stock on a stock turns basis. In your case, you can’t just move the price up and down as costs fluctuate, you need to forcast better and be more risk adverse, simply because you need to “hold” your sell price for far longer, come rain or shine. So 85c is probably a wise figure that I would agree with.

    For the origional poster, considering how long you need to hold your SELL price while the market moves in terms of your COST price will help answer the question for you in terms of how much to hedge.

    Matt

    #1106803
    MyGreatIdea
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    Spot on Matt !!

    Wendy :)

    #1106804
    Shaukat Adam Khalid
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    As an importer, you should be looking to import stuff that is price inelastic to offset any fluctuations.

    Since you are dealing with phyisical goods, have you considered writing currency options or trading currency futures through the CME?

    #1106805
    Geronimo
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    I have a client who does a lot of export. As the supplier, he’s always had his contracts written in AUD. While he misses out on the highs, it’s all swings and roundabouts, and accurate cash flow forecasts are more important to his long term viability.

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