Exporters worried as Australian dollar hits record levels against the euro

Australian exporters to Europe may suffer if Australian dollar’s record levels against the euro continue, according to the Australian Institute of Export.

The Australian dollar hit a record high against the euro early this morning, buying €0.8035 as traders deserted the currency over fears of the viability of Italian bank debt.

The long-term average for the Australian dollar is €0.60. The Aussie dipped against the euro in 2009, reaching only €0.50. It has been rising since then.

Australian Institute of Export general manager Peter Mace told SmartCompany this morning no one could tell if the Australian dollar would sustain the current level.

“Rates have been fluctuating a fair bit,” he says.

“It’s very difficult for exporters to plan forward, as orders tend to be of three to six month duration.”

“In the short-term there’s no real impact on Australian exporters, as they would have orders at rates that were decided on last year.”

“But if it maintains that level it could have an effect, especially for wine exporters. They’ve had a difficult time against a high dollar for the last year or so, facing competition from many other parts of the world.”

Mace says this effect was compounded by the depressed state of the European economy, which is likely to continue given the fiscal debt problems that plague many Eurozone members.

“There isn’t that potential market anymore. A lot of exporters have turned their focus to Asia.”

Some industries that could benefit are those importing from Europe.

“It might be good for car importers who are importing European cars, as the cost of landing cars in Australia is a bit cheaper,” says Mace.

He stressed that while the long-term trend placed pressure on exporters, this morning’s record high wasn’t likely to greatly draw their attention.

“In terms of short-term spikes, these will happen.”

“Companies don’t tend to focus on those much. It’s more the long-term trend.”