The AUD/USD has broken the 0.80c mark and hit fresh 5.5 year lows of 0.7934.
We’ve recently seen some very important market news regarding the European Central Bank’s (ECB) Quantitative Easing Plan. The ECB will purchase €60Billion/month in private & public sector debt/assets from March 2015- September 2016, with this set to continue indefinitely until a sustained path of inflation has been achieved.
Coupled with Canada’s surprise rate cut, which lifted expectations that the RBA will ‘shortly’ follow suit (40% chance currently factored in for the RBA’s first meeting of 2015 in February), there is no doubt that the AUD is amidst a downward spiral – though that does not mean that you have to pay for a weakening AUD as an importer.
There are a myriad of Hedging Structures available that guarantee you a rate above spot for an extended period of time and/or products that can provide you with a higher rate as the AUD falls; an inverse Bonus Structure that has proved to be extremely popular given the overall opinion of where the AUD is headed and recent performance.
Many Australian importers have been changing their $AUD budget and costing’s line in a reactionary fashion with 0.80c a very popular level. Now that this level has unfortunately broken, businesses must look for alternative methods to guarantee a profit margin and outprice their competitors who may not be as proactive. These products are based on pure protection and certainty, they are not ‘gambling,’ and I’d be happy to run you and your management team through some of these fresh and highly successful concepts.
Ellis Taylor is the Deputy Head of Sales, Corporate Foreign Exchange for World First Pty Ltd.
You can contact Ellis directly on (02) 8298 4903 or Ellis.Taylor@worldfirst.com