Australian businesses are bracing for more exchange rate volatility this year, with the dollar expected to move 20 per cent against the USD.
East & Partners reports that 88.9 per cent of Australian import or export businesses “strongly believe” that the AUD will be more volatile in 2014 than 2013.
Based on a survey of 862 businesses, East & Partners found businesses expecting the exchange rate to move up to 19.9 per cent, indicating a range of about $US0.72 to $US1.08.
“The number of variables impacting the AUD/USD continues to expand at a rapid pace,” East & Partners Senior Markets Analyst Martin Smith said.
“The interest rate differential with the US, relative rates of economic growth, balance of payments figures and commodity prices are just a few of the main influences on underlying changes in the closely monitored currency pair.”