Australian dollar Essay
a) A fall in the value of the Australian dollar (AUD) against the U.S. dollar (USD) benefit Billabong in two folds, strengthened price competitiveness and translation advantage. Firstly, the Americas segment accounts for about 50% of Billabong’s sales revenue in 2008 and 2009. (Appx.1) In case of depreciation of AUD against USD, the price of imported surfwear to the U.S. in terms of USD will decrease. The US importers demand more for Billabong’s products. The sales increases from the strengthened price competitiveness. Secondly, when Billabong received payment from the importers, it will translated back into AUD for use in Australia. As AUD depreciate, the receipt in USD can be translated into more AUD than before, bringing …show more content…
Billabong International Limited. (2009, December 31). 2008-09 Half-Year Result Overview. Retrieved November 28, 2013, from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzY2Nzc3fENoaWxkSUQ9MzYxOTIxfFR5cGU9MQ==&t=1
Third party royalties
Sale in Americas
Half year 2009
Constant currency: 16.3%
Full year 08/09
Constant currency: 12.1%
Aussie dollar set to struggle in 2009
The Australian dollar looks set to travel a wide trading range in 2009, as the currency is buffeted by the global financial crisis slowdown, falling commodities prices and a slump in economic growth at home and aboard.
The domestic currency also risks falling to a new all time low, particularly if the pace of growth in regional Asia countries and China slows more rapidly than expected, delaying a recovery in Australia.
The Australian dollar was trading around 67.83 US cents on Christmas eve 2008, down 23