Foreign exchange & tackle pricing

I look at foreign currency movements daily - my alter ego glances at a screen to see what the Aussie dollar is doing then glances out the window and wonders if the kingies will be in the Harbour tomorrow morning.

We live in a global economy - we can easily purchase items at the click of a computer mouse from most parts of this wonderful world we live in. The current strength in the Aussie dollar is a boon to importers. A strong Aussie dollar gives the currency more purchasing power, you get more bang for your buck when buying things abroad as the Aussie strengthens.

With that in mind I wonder if importers, wholesalers or distributers in the fishing game here have a sophisticated currency hedging mechanism - if they do then maybe they're doubling up and making a margin on currency as well as on the product they sell? The reason I say this is that product prices seem to go up when the Aussie dollar weakens but when the Aussie strengthens we rarely see a corresponding fall in prices.

The Aussie dollar recently broke through 88 cents US. From November of last year through to March of this year it hovered around the 65 cent level with spikes up and down due to market volatility. When the Aussie was in the doldrums at 65 cents I remember seeing price hikes in the retail sector - the price reductions don't seem to come as quickly when the currency strengthens.

There are a number of variables at play here - stock purchasing cycles might have suffered from unfortunate market timing and I'm probably missing other elements that influence product pricing. Whatever the case might be, when the Aussie dollar strengthens the punters start looking to import stuff from overseas themselves, bearing the risk of a loss of warranty and local customer service in order to save a few bucks.

I wholeheartedly support the Australian tackle industry and local businesses. Irrespective of whether you think unconditional support for local business is right or wrong, we live in a world where information is abundant and consumers seek transparency in pricing - when market conditions are bad the consumer seems to share in the downside but when conditions are favourable it seems that they are left out of the upside.

At the exact point in time that I write this the Aussie is buying 0.8841 US cents - I wonder who's getting the most bang for their buck now?