The
Australian dollar has declined significantly over the past two weeks from
around 103 US cents to 97 cents in recent days.
The
decline is caused by a number of factors including the relative strength of the
Australian economy (particularly our resources sector), local interest rates,
and the strength of our major trading partners.
We have
described the movement of the dollar as a "decline" although the
impact has varied effects and some would see this as positive for Australia.
Here are some of the effects -
1. Australian travellers will
find it dearer to travel overseas - perhaps more will travel within Australia
which could be good for tourist sites like QVM.
2. Overseas travellers will find
it cheaper to come to Australia- which could be good for tourist sites like
QVM.
3. Imported goods will be dearer.
4. Exported goods will be
cheaper.
Like most
economic shifts there are winners and losers. Tourism is likely to be a winner
in this case. How far is the dollar likely to fall? Some are predicting as low
as 60 cents although general consensus seems to place fair value at around
75-80 cents.
Warning -
much of this article is based on economic speculation.