Importers cheer dollar's strength(2)
Importers
For some small importers, the earlier weakness of the Australian dollar can still be felt.
Caterina Rasile of Rasile Global Importers in Melbourne said that despite the dollar's recent gains, retailers must sell off stock bought months earlier before they can get the benefit of the currency's resurgent pricing power.
Although the Australian dollar's value has increased in recent months, "if you've bought your product when the dollar was low, you've got to sell the product for a little higher," Ms Rasile said.
The Mediterranean importing company has hedged dollars in the past, although it has no currency hedged at the moment, and so is exposed to the variation in the dollar's value.
Pull back
Travelex's Mr Tuck said if the dollar remains high, companies will be forced to revise their budgets, if they haven't already. Nonetheless, he expects the Aussie's recent rise may have run out of steam.
"It has been a big rally," he said. "We're due for a pull back."
HiFX senior consultant Derek Mumford agrees. "We are seeing strong resistance at 84.75-85 US cents developing and do still expect a retracement back to 81.50 US cents next week," he said.
"We are looking to equity markets to be the catalyst for any pull back and the US housing data out next week may trigger some doubts about health of the any nascent recovery."
Based on recent US economic data, "I think the market has priced in plenty of optimism for now."
Mr Tuck is also forecasting a fall back to the low 81 US cents, but adds that even at that level, it will be "historically" high.
