For anyone paying attention to the currency markets in recent days, it’s no secret that the Australian dollar has taken a beating, most notably against its US counterpart. The AUD/USD exchange has fallen to a two-year low, and there doesn’t appear to be a major correction in sight.
According to analysts, there are plenty of reasons for the AUD’s poor performance – weak Australian retail data and stagnant wage growth have been cited as two causes of the market turmoil. For Australian sellers, the news is another sign that consumer spending is declining.
While the Australian economy is currently underperforming, the AUD’s drop does present a great opportunity for Australian sellers working in different international marketplaces, specifically the US and Europe.
Here, we’ll be discussing the advantages of taking your business global in the current market climate, how much longer the AUD can remain at its current lows, and why it shouldn’t really matter.
Why Now is a Great Time to Sell Globally
Under normal market conditions, selling globally is a great way to grow your business. Not only do you have more chances to offload your inventory, you’re also able to break into new international markets.
For Australian sellers, doing so now, while the AUD is weak, can be even more beneficial for the following reasons:
- You gain a competitive advantage – Given today’s exchange rates, products that are priced in Australian dollars are significantly cheaper for American and European customers than the same products that are priced in US dollars, euros or pounds. This gives you a distinct advantage over competing sellers, enabling you to increase sales.
- You’re able to expand your customer base – By targeting American and European Amazon, eBay, Walmart and Tophatter users now, you’re ensuring that when the AUD rebounds, you’ll have already established yourself to an entirely new set of customers. This can help create brand loyalty, positive word of mouth and repeat business.
How Long is the AUD Going to Stay Down?
When it comes to the question of how long the Australian dollar can remain so low, the short answer is that while economists and market analysts can make their own predictions, no one really knows. It’s important to remember that the economic news out of Australia is only one small part of the equation that determines the AUD’s value.
Case in point: A recently released GDP report showed higher than expected Australian economic growth. If you thought that such news would be good for the AUD, you’d be right (sort of). Following the report’s release, the AUD spiked in value, only to fall to a fresh two-year low shortly after.
For sellers, the point is that predicting changes in the AUD isn’t important – knowing how to take advantage of the situation is. By appealing to new customers now, you’ll be able to benefit from the market turmoil while expanding your business and growing your customer base.