GBP v USD June 2013


During the last few months the value of the Australian Dollar (AUD) has moved from about 1.05 down to around 0.95 United States Dollars (USD).

How does this affect each Country?

An Exporter in Australia who is selling goods for A$1,000,000 needs a US importer to pay the following prices, depending on Exchange Rates:

AUD-USD FX Rate of 1.05 : The US importer needs US$ 1,050,000 to buy the goods.
AUD-USD FX Rate of 0.95 : The US importer needs US$ 950,000 to buy the goods.
AUD-USD FX Rate of 1.10 : The US importer needs US$ 1,100,000 to buy the goods.
AUD-USD FX Rate of 0.65 : The US importer needs US$ 650,000 to buy the goods.

Why did I put an FX rate of 0.65 ? Keep reading and you will see why the US Importers would have been having a great time in 2008-09 🙂

This chart shows the movement for a 6 month period ending June 2013.

AUD-USD-2013-6m

But if we look back further in time, we see a different overall trend we see a move from about 0.65/0.70  in 2003-2004 rising to 0.95 in 2008 before dropping back to about 0.65 in the same year (The Global Financial Crisis GFC period).  It then steadily rose to 1.1 in 2011, and has recently come back to around 0.95 again.  This is the same value that it was BEFORE the GFC hit.

Is this about the correct level ? Or will it stabilise at another point ?

This chart shows the movement for a 10 year period ending June 2013.

AUD-USD-2004-2013

 

An interesting observation is the dip, followed by a rise, almost every year, just before the middle of the year.
It makes me wonder what direction the chart will go over the next few months.

AUD-USD-2004-2013-h


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