Dol­lar dip suits lamb ex­porters

Tasmanian Country - - NEWS -

WOOL, lamb, cit­rus and nuts should ben­e­fit from the fall­ing Aus­tralian dol­lar.

And while the dol­lar has bounced back against the US cur­rency after volatile trad­ing last week, it’s ex­pected to con­tinue to bounce around be­fore fall­ing fur­ther.

Rabobank’s head of fi­nan­cial mar­kets re­search Asia-Pa­cific, Michael Every, said the volatil­ity ex­pe­ri­enced by the Aus­tralian dol­lar in one day last week was more than ex­pected in an av­er­age year.

Last Thurs­day the Aus­tralian dol­lar briefly dropped more than 3 per cent to US67.49 cents — its low­est level since early 2009 — and then by mid-af­ter­noon it had re­cov­ered to US69.37 cents.

By Mon­day the cur­rency had risen to US71.3 cents — about 9 per cent be­low the US78.40 cents it was trad­ing at 12 months ago.

Mr Every said the dol­lar would con­tinue to “bounce around” and ex­pected it would drop back to about US68c.

“It is still too high and there’s a lot of things go­ing on in a lot of places,” he said.

Ru­ral Bank se­nior an­a­lyst Matt Ough said the mar­ket re­mained volatile and un­cer­tain given the tense state of trade ne­go­ti­a­tions.

“The Aus­tralian dol­lar could trend lower over the next six months as global is­sues such as Brexit and the USChina re­la­tion­ship add risk to cur­rency mar­kets,” Mr Ough said.

He ex­pected wool, lamb, cit­rus and nuts to ben­e­fit the most from a low dol­lar this year due to cur­rent strong ex­port de­mand and ad­e­quate sup­ply to meet the de­mand.

“A lower dol­lar doesn’t au­to­mat­i­cally mean more money for all Aus­tralian agri­cul­tural ex­ports. It needs to be cou­pled with grow­ing de­mand and ad­e­quate sup­ply to max­imise the ad­van­tage.”

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