I get confused myself over this exchange rate stuff. Let me try to explain it ths way:-
Suppose an exporter enters into a long term contact to sell its product at a contract price of US$100 per tonne, at a time when the exchange rate is 1US$=A$0.70.The exporter would end up receiving into its bank account A$70 per tonne.
Now under the same contract but at $ parity, the exporter ends up pocketing A$100 per tonne. A whopping 43% increase.
