Dollar Bite: Strong Greenback Puts Pressure on Aussie Wallets
The US dollar’s sustained strength is starting to squeeze Australian businesses across multiple sectors. With the AUD trading on the weaker side, costs for USD-denominated goods—machinery, electronics, clothing, chemicals, automotive parts and consumer products—have risen noticeably.
At the same time, freight components priced in USD, including BAF, LSS, CAF and certain local terminal fees, are trending upward as carriers adjust indexes to reflect global fuel and currency movements.
The combination of rising procurement costs and higher shipping charges is creating pressure on business margins, especially for importers reliant on stable FX rates to maintain competitive retail pricing.
Impact on Aussie Importers
Retailers and wholesalers are revising procurement budgets and, in some cases, shrinking shipment sizes to reduce exposure. Machinery buyers and automotive distributors are particularly affected, as many high-value items are fully USD-priced. Shorter rate validity from carriers—sometimes only 48 hours—is complicating forward planning and slowing contract negotiations.
Impact on Aussie Exporters
Exporters, on the other hand, benefit from a weaker AUD because it boosts competitiveness abroad. However, FX volatility creates uncertainty, making it harder to lock in long-term pricing with overseas customers.
Some exporters also face increased USD-linked surcharges on outbound freight, which can erode part of the competitive advantage.
How Australian Businesses Can Weather the Currency Wave
- Implement USD hedging strategies for large or frequent import orders.
- Shorten quote validity periods to avoid margin erosion.
- Bring forward shipments where feasible to pre-empt further FX fluctuations.
- Exporters should leverage market conditions by pushing into USD-dominant markets such as the US, Middle East and Southeast Asia.
- Regularly review all landed-cost models, including fuel and currency surcharges.
Source: Global FX market trackers, carrier surcharge updates & AUD–USD trade lane reports
Disclaimer – Market data is from public sources we consider reliable but has not been independently verified; accuracy is not guaranteed