Booming money market tempts public to spend overseas

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) September 21, 2010 -- Booming money market tempts public to spend overseas

Date: September 22 2010

Aaron Cook

JEFF DAVENPORT knew he had to have the iPhone 4 when it came out, but he was not prepared to pay the $1250 that local retailers were charging for a phone not tied to a contract. Instead, he picked one up from an online store in the US for $A900.

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Booming money market tempts public to spend overseas

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''I chose to purchase from the US because with the high Australian dollar it was much cheaper than from the local stores,'' Mr Davenport said. ''It was shipped with a free case and was available instantly, whereas local stores had a four-week waiting period.''

Mr Davenort, of Moore Park, has used the surging Australian dollar, which peaked at US94.94¢ yesterday morning, to pay for a trip to Thailand for orthodontic surgery. The trip, including 12 nights in a four-star resort, has cost $4500, compared with the $18,000 he would have paid for the same surgery in Australia.

Kristy Carstairs, the Oceania manager of the accommodation website Hostelworld, said Mr Davenport was not the only Australian taking advantage of the exchange rate to book overseas travel. Hostel bookings by Australians for Indonesia, China and Singapore this month had risen more than 20 per cent on a year ago, she said.

A spokesman for Choice, Christopher Zinn, said the immediate effect of a high Australian dollar on consumers was more online shopping and overseas holidays. It also created an expectation

that prices in local shops would drop quickly, he said. ''It does excite something in us when you get the feeling that things might be cheaper.''

The chief executive of the electronics retailer JB Hi-Fi, Terry Smart, said there was no doubt that in the next few months prices for electronics would fall.

''The biggest impact is always competitive pressure between suppliers. As soon as one moves they fall like dominoes.''

The falling US dollar may also make that American icon the Harley-Davidson a more common sight around Australia. Tim Gold of All American Imports buys second-hand motorcyles in the US and then finds Australian buyers. The number of inquiries had more than doubled in the past four weeks, he said.

Many Australians would also benefit from petrol prices remaining low, said an NRMA spokesman, Peter Khoury. On average every 1¢ rise in the Australian dollar against the US dollar led to a fall of 0.6¢ at the bowser, he said. The average petrol price in Sydney yesterday was 118¢ a litre, compared with 128¢ five weeks ago, when the dollar was about US90¢.

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