Bank concerned about dollar drop

Bank concerned about dollar drop article image
A Commonwealth Bank report into currency expectations among Australian importers and exporters has delivered some worrying news. While nearly three out of every four importers and exporters expect the Australian dollar to increase in value by the end of the year, executives at the Commonwealth Bank are forecasting for a currency fall. The Aussie Dollar Barometer, an initiative of the bank, surveys medium-sized importers and exporters to gauge their expectations, risk management procedures and exposure to changes in foreign exchange rates. The latest report indicates that traders are not doing enough to protect themselves from currency fluctuation, with only 38.8 percent of importers and 49.2 percent of exporters planning to hedge their exposure to variations in currency value. The optimism among traders is a concern to Robert De Luca, executive general manager of Corporate Financial Services at the Commonwealth Bank. "The data suggests that many importers could be leaving themselves exposed to falls in the Australian dollar. Now may be the time for businesses to reassess their currency position, rather than leaving their business open to cost pressures down the track." The Commonwealth Bank is forecasting the value of the Australian dollar to drop to 90.0 US cents by the end of this year.


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