With the relative robustness of the Australian economy and increasing expectations for interest rate rises in the coming months, the Australian dollar (A$) continues to appreciate - with some banks forecasting it to reach 90US¢ by the end of the year.
September marks the first time this year that the dollar has traded above the previous year's level. At the close of trading on Thursday, the A$ was trading at 86US¢. This trend is likely to continue, and the year-on-year difference will only increase over the next few months, as 2008 saw the A$ rapidly fall to 61US¢ by late October. Given the sluggish beef export conditions in most markets, the higher A$ will only add to the difficult trading conditions faced by Australian exporters.
Reprinted from Meat and Livestock Australia