Home > Optimism up for some as dollar dips

Optimism up for some as dollar dips

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Some manufacturers are seeing an improvement in their fortunes as the Australian dollar comes down from its 2013 peak.

The Australian reports that the dollar is down 15 per cent against the US dollar since April 2013, and the competitiveness of many businesses has been bolstered.

“There are grounds for optimism, especially with a gradual weakening of the currency,” explained Austrade’s chief economist in a recent interview with Manufacturers’ Monthly. “Looking at 2014, I can see things starting to turn around, with the currency starting to come down to where it should be, in line with the fundamentals of the Australian economy.”

Casella Wines, maker of Yellow Tail wines, makes about three-quarters of its sales in the US. Last year it appeared to be in trouble, reporting its first annual loss in over a decade.

“The re’s a lot more confidence out there,” Casella CEO John Casella told The Australian.

“At least the losses [this year], if there are any, won’t be anywhere near as great as they’ve been.”

BlueScope, which returned to profit in the last six months of 2013, has seen its shares increase by 15 per cent in the last five weeks as investor sentiment picks up.

The currency – cited by Toyota Australia and GM Holden executives in their reasons for quitting manufacturing in Australia – has weakened too late for the automotive sector to benefit.

This morning at 6:30 am the Australian dollar was trading at $US 0.8989, according to News Corp. In April last year it was $US 1.05, with some then calling for the Reserve Bank to devalue the dollar.

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