Australia is now the cheapest place in the world to buy an iPod, thanks to the Australian dollar’s sharp decline, a new study shows.

And it’s not just good news for music lovers, with CommSec saying the currency’s decline will boost Australia’s trade competitiveness and help insulate the nation from the global economic downturn.

The CommSec iPod index shows that Australia is the cheapest place among 62 countries to buy an Apple iPod 8gb nano music player. It ranked as the 14th cheapest in July.

CommSec chief equities economist Craig James said the sharp drop in the Australian dollar had improved the currency’s competitiveness, although the question now was whether it had fallen too far in relation to other currencies.

“While the local price of an iPod has actually fallen since July in line with other countries, the Australian dollar has fallen further than most currencies against the greenback – down over 45 per cent – thus boosting Australian trade competitiveness,” James said.

The CommSec iPod index is a light-hearted look at currency movements and purchasing powers, in a similar way to The Economist magazine’s index based on McDonald’s Big Mac.

In Australia the new 8gb iPod model is now priced at $199.

On the CommSec iPod nano index, Australia’s price comes in at $US131.95.

James said Australia is the cheapest place in the world to buy an Apple iPod by a considerable margin.

“South Korea ($US139.72), Canada ($US138.73) and Indonesia ($US138.47) are vying for second spot, but prices in each country are around five per cent dearer than in Australia,” he said.

“The sharp fall of the Australian dollar since July will boost trade competitiveness and assist in insulating Australia from the downturn in the global economy.

“Over 2000 and 2001, the Australian dollar fell by 28 per cent to a record low of 47.75 US cents, helping to insulate the economy from recession in the US.”