Consumer electronic vendors and distributors of technology products are set to pocket millions as the Aussie dollars climbs back to nearly $0.80. Analysts a Westpac believe that the dollar will go over $0.80 next month. Currently it is trading at $0.78.
Consumer electronic vendors and distributors of technology products are set to pocket millions as the Aussie dollars climbs back to nearly $0.80. Analysts a Westpac believe that the dollar will go over $0.80 next month. Currently it is trading at $0.78.
Fluctuations in the Aussie dollar could lead to price cutting at a retail level in a move that will benefit Companies like JB Hi Fi and Dick Smith says analyst, Tim Schroeders of Pengana in Melbourne.
Earlier this year Companies like Sony announced price increases of up to 30% claiming that the fall in the Aussie dollar to $0.63 was set to impact their bottom line. LG, Samsung and Panasonic also announced price increases of between 10 and 20%.
Currently the Aussie dollar is climbing faster than any other major currency because of optimism for a global economic recovery claim Westpac economist Bill Evans.
Since December when Sony announced their price hikes the dollar has steadily climbed and since the Feb. 25 when Panasonic announced additional price increases the dollar has risen 21%, the quickest gain since it started trading freely in 1983, according to data compiled by Bloomberg.
Steve Rust the Managing Director of Panasonic Australia said that issues relating to pricing are discussed quarterly and the rise in the Australian dollar will be discussed at their next quarterly meeting.
“The problem for us is the Yen to the US dollar. Where we are sourcing products from Japan we have to take into account the performance of the Yen however with some products which are manufactured outside of Japan we trade in the US dollar and if there is be price cuts it will come on products that are affected by the US dollar as opposed to the Made In Japan products” said Rust.
“Each Panasonic category is different. For example our Lumix cameras are manufactured in one Country while our air conditioning is manufactured in another. Panasonic will always be market competitive and if we can pass on savings we will do so” he added.
Sony who not only passed on increases of up to 30% but also failed to cut the price of their Playstation 2 console when Sony slashed prices in other Countries by up to 15% have refused to comment on their pricing policy.
“The bears are throwing in the towel, and the Aussie is undervalued,” Paresh Upadhyaya told Bloomberg, who helps manage $21 billion in currency as a Putnam Investments senior vice president in Boston. Policy makers “still have the rate differentials to support the currency,” Upadhyaya added.
“Asia is still going to expand, and China and India will have growth above 5 percent. That’s fueling demand for commodities, so Australia’s exports are holding up much better than the rest of the G-10 countries.”
Australia is at the “vanguard of a global recovery,” Glenn Maguire told Bloomberg, a Societe Generale SA economist in Hong Kong, after reports showed retail sales jumped by the most in three months in March, exports to China soared 70 percent this year and the jobless rate unexpectedly dropped in April.
Woolworths Ltd., the nation’s biggest retailer, said in April that first-quarter sales rose faster than analysts estimated. JB Hi-Fi Ltd., which sells televisions and DVDs, soared by a record 17 percent Feb. 10 after its earnings beat estimates.
“Importers like JB Hi-Fi are big beneficiaries because they’re buying electronics goods from Japan and cheaper imports from China,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “The purchasing power when the Aussie goes up means they can cut prices and still maintain profit margins.”
