Recent strength in the Australian dollar should warrant a review of currency strategies for exporting and importing businesses alike.
According to Kelly Spender of Travel Money Group, the Australian dollar is at a more than two-year high against the US dollar having cracked the 80 cent mark, a surge of some 6.5 per cent in the last three months alone.
“We haven’t seen the AUD-USD rate at this level since May 2015. The demand for the USD … is also reflecting this high we’re seeing in the markets. Our store enquiry for the USD is through the roof.”
The surge is contrary to the forecasts by some economists – as recently as this May in which AMP Capital had forecast a depreciation in the Australian dollar.
Recent research by American Express found that businesses lost an average of $23,500 to adverse exchange rate movements – much of which could have been avoided through better management of the currency buying and selling process.
“Unfortunately, in many cases, the approach to managing FX hasn’t kept up with international ambition. This disconnect is putting a lot of stress on local companies,” said Barry Fletcher, VP and general manager of American Express International Payments’ JAPA division.