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CE Prices Set To Climb “Significantly” In New Year Consumers Urged To Spend Up Big Now

CE Prices Set To Climb "Significantly" In New Year Consumers Urged To Spend Up Big Now

Powemove CEO Crawford Giles said “it is inevitable that prices will rise as the Australian dollar has fallen over 30% during the past few months”. 

A Harvey Norman franchisee in Sydney said “We are holding a lot of prices right now but after Christmas and due to the dollar tipped to fall to below $0.60 cents by Christmas prices will rise and rise substantially” they said.

Analysts are tipping that the Australian dollar will dip into the 50s as the economy attempts to rebalance itself.

 while a dithering US Federal Reserve committee’s “irrational dream” of normalising interest rates 
Mark Farrington, the head of the $US7.7 billion macro hedge fund Macro Currency Group is tipping that the Australian dollar will start falling below $0.70 cents to the US dollar as the US economy adjusts.

One issue that will impact retailers selling overseas made consumer electronics and appliances is that the US Fed is finally poised to raise US interest rates a move that will drive the Australian dollar down. 

Analysts believe that the $A ‘needs to fall another 10pc’

“The Australian dollar needs to fall another 10 per cent. Looking at the ‘OIS strip’ [short term money market pricing] it’s incredibly conservative. I don’t think the market expects a full quarter point rate cut until August, which literally means not at all.” Farrington told Fairfax Media recently. 

Based on previous commodity cycle turns and periods of US out-performance, the Australian dollar he says is likely to dip into the 50s before it bottoms out but should trade in a range of 62 to 69 in 2016.

He expects the US Federal Reserve to signal that they will raise rates at every alternative meeting next year in a move that will impact the Australian economy.