Making dollars out of Dracmas

Making dollars out of Dracmas

While it is hard not to prophesy doom and gloom from the tail-spinning Aussie dollar, there are still some prepared to look for an upside from the local currency suddenly looking more like a drachma than a dollar.

When the dollar first plunged into the low 50 cent range during September, the Australian Information Industry Association (AIIA) pointed out a falling dollar was also presenting opportunities.

As the local currency weakens against foreign counterparts, the AIIA pointed out that the products and services offered by Australian companies were becoming far more affordable overseas. Meanwhile, foreign companies see Australia as a far more attractive place to invest R&D resources or open local operations.

Although the evidence of this actually taking place is currently pretty thin on the ground, in theory it is a potential positive for the Australian IT industry.

However, one group of Australians who are clearly benefiting from the current exchange rate are those IT professionals who are working in the US or are employed by US companies and earn their crust in greenbacks.

The IT industry's evolutionary path is being steered from the US and there is much wealth being generated as a result. Basically, most economists would agree it is the strengthening of the US dollar that is affecting Australia's currency as opposed to the Aussie dollar weakening.

With skills shortages rampant and venture capital still free flowing, market forces have driven wages up across the board. If you happen to be an Aussie making these inflated wages, your money can now go a lot further than it used to back home.

Similarly, anyone working for a US company on a package which includes share options is also reaping rewards from the strengthening greenback - providing of course the stock has been ascendant in value.

A local who is holding an option issued at $10 for a stock that has risen to $15 while the Aussie dollar has slipped back to 50 cents, may well be laughing but I fear they may be relatively few in number.

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