Finance Finance News iPad prices show Aussie dollar is at fair value

iPad prices show Aussie dollar is at fair value

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Farmers, manufacturers and tourism operators might beg to differ, but if iPad prices are anything to go by, the Australian dollar’s current value is exactly where it should be.

According to CommSec’s iPad Index, which compares the price of the popular Apple product across 51 countries, the recent rise in the dollar has it hovering around fair value.

The currency has climbed from around 87 US since late January to be at almost 94 US cents.

With a sale price of around $A598 ($US561), Australia is the 13th cheapest place to buy the latest iPad, putting it roughly on par with the US and China.

“It suggests that the Aussie dollar is probably around fair value against the greenback,” CommSec economist Savanth Sebastian said.

“The iPad is priced in US dollars and manufactured in China and across both those economies the Australian pricing on an iPad is pretty similar.”

The cheapest place to buy an Ipad is Japan at $US480, while Argentina is the most expensive at $US974.

The index shows the cost of buying an iPad in Australia has increased by around $60 from six months ago, though the price increase coincided with the release of the new model iPad Air.

CommSec’s index is modelled on The Economist magazine’s well known Big Mac Index, and measures the purchasing power of consumers in different countries.

With inflation more or less in check in the US and further interest rate cuts unlikely in Australia, Mr Sebastian expects the dollar to remain roughly around its current level for the next few months.

“Over the near term it’s probably going to hold around these levels, we don’t see it heading back below 90 cents for some time,” he said.

“There’s really not much of a catalyst to suggest there is a need to push it in that direction.”

But while the currency may be fairly valued from a consumer point of view, Mr Sebastian said a lower dollar would help the economy by making Australian exporters more competitive.

“There’s no question that a lower currency would be a lot more beneficial in readjusting the Australian economy,” he said.

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