Dylan T

The Aussie dollars have been getting stronger against most currency. Strong currency will likely make export unfavorable. Many countries will sell their own currency in order to maintain their competitiveness. The government here does not seem to do anything. Will you think the local economy is going to be hit badly?

Weebie

The only thing Australia exports are resources that are needed by countries like China, South Korea and Japan. Chinas growth would stall if it could not access to the Ore and Gas.

Australia has pretty much eliminated large amounts of manufacturing in the past 10 years.

Loch Lomond

The expected RBA rate rises will add strength to the Aussie Dollar. Most analysts forecast that the increased commodity prices will mean an negligible effect on export profits.
If they are correct, it will be good all round...oh, other than people migrating to Aus.

iamthecreaturefromuranus

Not necessarily "good all round". Plenty of global companies, mine included, price their staff in US dollars. The continuing increase of the Aussie dollar vs US dollar is making Australian staff ever more expensive. That will start to make an impact on employment eventually.

lapin_windstar

Commodity exporters costs and revenues are pretty much all US dollarised anyway so the AUD's strength or weakness is irrelevant to them internally. The real risk is that Australia gets even richer off commodity exports in the short term - there's a huge amount of complacency in commercial and political circles about Australia's economy.

We're actually in a very precarious position: what happens if China takes its pedal off the accelerator? What happens when Chinese investment in Mongolia, Africa, South America brings alternative energy and minerals supplies online?

Meanwhile, we've totally ignored the rise and rise of our regional competitors for high-value exports (professional services, finance, project management, design) who have been working their bollocks off to improve standards, build links to developing markets and learn important languages.

Amazulu

It is what it is and out of our control - chill.

Amazulu

It's the end of the world as we know it.

jimbo_d

If China does stop buying so more raw resources from Oz, which no doubt one day when Africa sorts out it's troubles it will, then there would be a slow down. This would be accompanied by a fall in the AUD however, making Australian goods and services cheaper.

Firms that export Australian talent abroad are losing out with the dollar, becoming very uncompetative with high labour costs and a high dollar, however I think the biggest loser from the high dollar is tourism.

Loch Lomond

I find that strange. I've been on expat packages a number of times in the Oil industry. Although the expats in the company were priced in US Dollars, local staff were paid the going national rate for thier job. What industry are you in?

iamthecreaturefromuranus

IT. We are paid in local currency but the company as a whole calculates how much 'employee type X' costs globally in US dollars.
Indian staff are obviously the cheapest but to be honest they are generally not up to scratch for lots of things. When it comes to placing work that requires, lets say native English speakers as part of the role, it would have been between the US, UK and Aus. There was a time, and pretty recently at that, when Australia was winning work from the UK and US, its why I'm here in the first place. That's now stopped.

freebo

The treasury has advised Wayne Swann that the strong AUD presents a risk to the budget forecast, this is because the strong dollar is affecting tax revenues i.e. Australian companies profits are being affected (source Financial Review last Thurs). The budget assumes 85c, not 100c or higher.

As discussed in another thread commodities are priced in US Dollars, a stronger AUD means you get fewer of them in return for goods priced in USD and therefore less profit in local currency.

Its great for importers of course, but awful for the tourism industry and exporters.

James516

Maybe they learnt their lesson

897nicole

Surely the strong AUS dollar must be hurting the Australian Export market particularly in mining, manufacturing and services. The government has to be aware and counteracting this??
It was also stated yesterday by the AUS tourism board that the tourism trade is struggling to capture European and American visitors, however Australia has seen massive growth in tourists from China.
What tools do the Australian government have to stabilise this growth apart from interest rates?

lapin_windstar

That sounds good - but Australian services and manufacturing have been so de-prioritised and left on the back burner for so long that even if the AUD plummeted, it's still not going to make them competitive and fixed overnight.

And yet we're still massively reluctant to get kids and employees skilled up in dealing with Chinese and Japanese clients, let alone speaking Japanese, Korean, Chinese etc! I will try and find the article but last January there was some sort of trade body that was saying SE Asian tourists are turned off by the lack of language support and shitty treatment from people working in tourism.

Steve2009

If you think people are slow to reduce the asking prices for their homes, wait until you see how stubbornly they will fight a pay cut. What's social welfare like in Australia?