AUD vs USD & Locking In Exchange Rate

mattmacman on 17/03/2017 - 18:29

Hey everyone, likely headed to the US in August for 6 months on exchange. I will probably spend in the range of 15-20k total and I'm just sussing out how I want to approach storing/spending my money.

I do have an American bank account from my last extended trip over there however I believe I left it in a small overdraft and it has remained that way for ~7 months now (woops!). Last time the exchange rate was pretty bad (~67c), so seeing the rate at ~77 cents now I am pretty keen to lock in at least some money at this rate.

I have ~10k ready to go in my bank account and am essentially deciding between OFX'ing some of that to my US account or putting it on a CBank or Global Wallet cash card in USD. The rate for Forex seems a decent bit better than CBank or GW however I don't know how I feel about leaving it in my Regions (US) account, I know that might seem stupid but I just have a weird feeling about it. I am going to sort out the overdraft in the next couple of days and hopefully that's all good.

I also have a citibank au account which I found to be a great transaction account with a good rate for travelling that I will probably use.

Any advice regarding AUD vs USD or locking in a rate would be very helpful!

Financial

Comments

  • captobvious on 17/03/2017 - 18:54
    +1

    nah don't lock it in, the us is going into the dark ages.

  • DogGunn on 17/03/2017 - 19:44
    +1

    The only way you can really lock in an exchange rate is to do the currency exchange now, but all cards that support that give shitty exchange rates. What airline do you fly most? Because at least use one that gives you points (i.e. Qantas Cash or Virgin Global Wallet) if you're going to go and exchange it now.

    Who knows what is going on in the US though. There is high business optimism at the moment, so the value of their dollar could go up, which would justify you locking in the exchange rate, but many people think it's a bubble, which will be corrected in the not too distance future, resulting in better exchange rates for you.

    Maybe do half of that 15-20k now - send half to your US bank account, using Citibank's free overseas money transfer. The rate they give is average though.

  • chumbucket on 18/03/2017 - 08:45
    +1

    TransferWise usually passes on a really good exchange rate, I've used it a few times and its typically pretty quick. As of this post they are offering $0.77030 (guaranteed for 48hrs) which is really close to the current exchange rate.
    Theres a referral wiki on OZB for transferwise too if you do use it (I wont spam you with my link).

    As for what to do and when, its hard to say. With banks starting to hike rates here, but export prices going up our dollar could still go higher, however the US economy is also doing well, unemployment rate is going down etc, so its really a mixed bag.

    My 2 cents is go with DogGunn and put 10K there now, especially if you might have a high(er) interest account there, and US interest rates are increasing.
    Then if it hits .79-.8ish send the rest over, I would be very surprised if the rate gets anything higher than that.

    But be wary of our own RBA hiking rates in the mean time.

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