The Australian dollar has returned to its highest level against the US dollar since early November, and has also reached a record high against the Euro.
Analysts have attributed the $A’s climb to above US $1.03 and 80.1 Euro cents this week to improved economic data from the US and China and continued economic uncertainty throughout Europe.
Economic news from the US has fuelled hopes the economy is gaining momentum, with US manufacturers reporting their best month of growth for more than seven months and construction industry spending increasing in three of the past four months.
AAP news has also reported that China’s purchasing managers index has registered an expansion in manufacturing activity in December after contracting in November.
At the same time the Euro is under pressure due to ongoing economic jitters throughout Europe.
While a stronger Australian dollar inhibits the price competitiveness of Australian beef in key export markets, wild fluctuations in the dollar are an even tougher problem for exporters to manage.
A once-cent shift in the currency value of the Australian dollar represents the equivalent of $45m in revenue to the Australian Beef Export industry, Richard Rains, the chief executive of Sanger Australia, told last year’s Royal Queensland Show.
Australian exporters may well hope that forecasts about the $A in 2012 made by Royal Bank of Scotland currency trader Jesper Bargmann to Bloomberg news yesterday prove prophetic.
“The Aussie will not suffer as much this year on risk-selloffs, as it is moving away from being a high-yield risk play to becoming a safer alternative in Europe,” he said.