Hey Guys,
I am off to the US in May, just wondering if anyone would like to share their thoughts on the AUD movement, at the moment $1AUD is buying around USD$1.016 which is big dropped from the highs of about ~USD$1.05.
I am hoping for it to get back to those highs soon but from reading the news there are so many factors affecting the currency market that it may be awhile before it recovers but who knows……
Your thoughts?
Thanks.
People who know would not need to visit this site
Haha, embrace the $1.00 rate - when I travelled to the States the exchange rate was 0.50 and it was STILL cheaper there on most things LOL.
I heard recently that the reserve bank felt the Aussie dollar was too high compared to the US dollar and they were trying to find ways of lowering the Aussie dollar.
However if you are travelling in May which is only two months away I would say that the rates are not going to drop too much. IMO it's the way you look at it. If you set yourself a realistic exchange rate, say 0.98 and get a higher exchange rate that's great. So my advice would be to plan on the exchange rate being low and I think you will be surprised.
The Reserve bank has been known before to intervene in the currency. Wouldn't be surprised to find they are doing so now. All the interest rate cuts havent had much effect so they may now try this tactic.
The Governor said that it should be around the 97c mark
They've also said before that they just don't have the firepower to go against the market in any significant way. In other words, deal with it, exporters.
AUD is high mostly because of other nations' woes, which we can do nothing about.
The only way to weaken a currency in the current monetary environment is to embark on quantitative easing. However, in practical terms, this is only really feasible for countries with near-zero interest rates such as the US and Japan.
The Aussie is over valued on a PPP basis and always has been. However, in commodity terms it is only slightly overvalued, which is what counts. Australia is an exporter of energy and food. I don't see demand for either going down much in the long term.
Transfer a % right now, then if it goes down you wont be as bad off.
Similar to a fixed and variable rate home loan
Sorry, I seem to have misplaced my crystal ball.
On a more serious note, this may not answer your question, but it is the strategy to reduce pain of exchange rate which I do for international travel:
Have a great time !!
Cash exchange at the destination. Reasoning behind it is that there would be less people wanting USD in the US and some would need to buy AUD (I am hoping). May be google the exchange rate for AUD > USD in US.
Dont bother, your rates of exchange for cash are always going to be poor. Much better than at the airport, but still poor.
Load up your 28 degrees with some cash, then withdraw it when your are in the US before making any purchases (or make allowances for purchases made) that way you get a good rate for the cash.
Better still have the Citibank plus account where you use this for cash advances and the 28 degrees for credit purchases.
On West coast most 7/11's have a Citibank ATM (No experience on this with Midwest/Eastcoast so maybe others will know)
Search Citibank Plus on Ozb for details
Impossible to tell, but seriously it's a 4% difference, not much to lose sleep over. Be grateful that you're going this year rather than 10 years ago when the AUD was around 55c US.
Thanks guys, yeah I will probably buy some USD cash now and the rest will go on my 28degrees card.
Cheers!
It's best to buy a third now, a third in the few weeks and a third just before you leave. Hedge your bets
If you think about it, a $0.01 movement will only affect $100 per $10,000 you spend so buying US cash now will just be a waste since they always undercut the published rate by 10%.
I highly advise starting a citibank plus online account, you then get a visa debit card which you can use to withdraw USD when you get there free of charge (you need to pay any local withdrawl fees probably be USD$0.50 or something) and there rates are always good.
I always use it and never exchange cash before hand as there is always atms at the airport when you arrive so you can withdraw some walking around money.
Just my 2 cents worth….
Have a good trip!
Just keep your money in a savings account. If you get 5%/annum interest it effectively makes your exchange rate 0.83 cents/$ higher after 2 months. Better to take a guaranteed 0.83 cents improvement rather than gambling on exchange rate fluctuations.
Sorry resurrecting an old thread. AUD went below USD$0.73 now and is apparently on parity to Singaporean Dollar.
Who knows?
You know that the currency market makes no sense. The US is facing cutbacks in public services due to the spat between the White House and Congress and yet…