T.G. Cooper's Forex - Currency Conversion Blog

Australia - The dollar and beef exports

2010-11-20T08:46:00.000-08:00

THE Australian dollar's historic eclipse of the US greenback this week has highlighted the dramatic changes being seen in the international grinding meat trade this year caused by currency movements. The Australian dollar continued its upwards spiral, hitting US100.2c during trading on Tuesday.Driven squarely by currency, Australia's manufacturing beef shipments to the US for the month of October totalled just 8951 tonnes. That's the lowest figure for any month since January 1996, and a 45pc slide on the same month last year, as exporters seek customers in other parts of the world less exposed to currency changes.Russia, on the other hand, has seen a dramatic five-fold increase in Australian grinding beef imports over the same 12-month cycle.So significant is the currency impact that some analysts are suggesting that after 40 years dominating Australia's grinding meat price trends, the US may no longer provide the price-setting role for Aust-ralian 90CL manufacturing product.Instead those price signals may now be set by a basket of "second-tier" markets, including Russia, Indonesia and others.Recent reports out of the US illustrate just how profound the currency impact has been.US Cattle Buyers Weekly publisher, Steve Kay, reports a record-wide price premium has emerged for imported lean (90CL) beef over US domestic 90CL beef, causing headaches for importers and some US end-users.While total beef imports to the US for the year to date are down only 5pc on the same period last year, imports from Australia (predominantly frozen 90CL) are down 27pc, and from New Zealand, down 6pc.So far this year, Australia has filled only 40pc of its tariff-free US quota of 379,0000t, sliding to second place behind Canada as the largest outside supplier to the US...

Source: farmonline.com.au

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Euro ticks higher vs dollar

2010-11-19T19:49:00.001-08:00

The dollar dipped against the euro on Friday as officials from Ireland, the European Union and the International Monetary Fund negotiated a financial aid deal for the country.

Ireland appears likely to receive a loan to bolster its troubled banks, which would ease fears that Ireland's troubles would lead to a broader loss of confidence in European nations and raise borrowing costs for other weak economies like Portugal and Spain.

Uncertainty over whether creditors would suffer heavy losses on their Irish investments have weighed on the euro for two weeks, dragging it down from a nine-month high of $1.4281 reached on November 4. The prospect of a rescue for Ireland has helped the European currency regain some ground in the past several days.

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In late trading in New York, the euro edged up to $1.3672 from $1.3635.

The euro remains significantly higher than a four-year low below $1.19 it touched in early June, when Greece's debt problems had driven down the euro. A 110 billion dollar rescue for Greece helped ease its short-term funding problems.

Worries about slower growth in the US and the Federal Reserve's plan to support the economy through lower interest rates helped tug the euro higher throughout summer and early autumn despite lingering concerns about debt in Portugal, Spain and Ireland.

Elsewhere, the dollar traded mixed. The British pound fell to $1.5973 from $1.6044, while the dollar was almost unchanged at 83.49 Japanese yen from 83.45 yen late Thursday.

The US currency fell to 1.0183 Canadian dollars from 1.0214 Canadian dollars, and dipped to 0.9952 Swiss francs from 0.9965 Swiss francs.

Gold for current delivery closed at $1,352.20 per troy ounce on Friday on the New York Mercantile Exchange, down from $1,352.90 late on Thursday.

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