A falling dollar is not all bad
Australian companies with international earnings will also benefit, as the profits they make in other parts of the world will be worth more back home. On the other hand, importers will suffer, as will companies that make significant purchases in foreign currency.
International investments will become more expensive, however, if the investment is unhedged ( not protected against currency movements), then any future income returns or capital gains will be worth more if the dollar keeps falling. REVIEW PROPERTY INVESTMENTS Australian property will become more attractive to foreign investors as the dollar falls, which could push property prices up further.
Many people blame foreign demand for meteoric price rises in Sydney and Melbourne in the past 12 months . . . although we don’t believe that’s the whole story.
Still, the government has taken steps to crack down on foreign investors that breach our strict laws, and of course all applications by foreign citizens must be put to the Foreign Investment Review Board.
This should keep undue influences under control, but foreign demand could still serve as a floor under property prices as the dollar falls.
Finally, while the Aussie dollar has hit the skids against the greenback, it is still holding up against the euro. So while a trip to America is more expensive, it’s still cheap by comparison to go to Europe.