This was published 9 years ago
Australian dollar falling: Destinations that are still good value
There are still countries where you can make the most of the Aussie dollar.Credit: Getty Images
Sure, you might not be getting dollar-for-dollar in the US any more, but the recent fall in the Australian currency against the greenback is not traveller Armageddon – you can still be getting out of here with value in your wallet.
This is because the seemingly rapid fall of the Aussie was not about it devaluing in itself, but about the US dollar strengthening. "Most people looking to get their information from the TV would have seen these reports of the Australian dollar falling rapidly but that's due to US strength," says Eamonn Sheridan, currency and market analyst at Forexlive.com.
The bad news in that for those planning an American adventure is, "It appears to be more than a short term trend and overall there's more for it to fall," says Sheridan. "It might head off sideways and not fall immediately but overall the way is down against the US because the US is strengthening overall."
Now is a good time to visit Italy and help support their economy.Credit: Shutterstock
For those of us who remember getting 60 Australian cents to the US dollar last millennium, the current high 80 cents marks still seem reasonable. "You can go to US and still have a great holiday and not spend too much. It's not a hugely expensive country," says Sheridan.
But if you're short on readies and want to get more bang for exchanging your buck, where should you be holidaying now? And where should you avoid?
Go: Southern Europe
As of early this week, the news wasn't bad for the Australian currency against other majors. It fell against the Euro, but came back. Sheridan says value for travellers in Europe, however, is not so much about the exchange rate as about internal economic conditions.
"Spain, Italy, Portugal, France, Greece - their economies are quite weak. It's not good for them, but for tourists it's a good time. Southern Europe is struggling, so I'd also suggest it's an opportunity to support them and spend some money in their economies." Ireland fits that bill as well.
Avoid: Germany
The exception to the above rule is Germany, whose economy is strong.
Avoid: the United Kingdom
"The British Pound is strengthening," says Sheridan. "There's never much value there for the Aussie." While Australians are pretty used to getting a pittance back in this exchange but flock to London anyway, penny counters should consider their options.
Go: Japan
"The Japanese Yen has been declining reasonably rapidly over the last 18 months or so," says Sheridan. "The Aussie against the yen is reasonably stable. And yes, it's all relative, but compared to other currencies, the dollar is doing okay there."
Avoid: China
"China still has a reasonably strong currency," says Sheridan. "You won't get as much bang for your buck."
Go: New Zealand
The NZ dollar has dropped; in fact, it's dragged the Aussie down a bit with it on international money markets. But not on par. In current circumstances, the Australian dollar is worth in Kiwi, what the US is worth in Aussie. Cross the ditch and feel rich.
Go – for now: USA
It's really not that bad, you know. 85-plus US cents will get you pretty far in a country where volume continues to keep consumer life relatively cheap. As for how low the US can go and when, Sheridan predicts further falls, but adds "I'd say 82 cents is going to be the limit for the next six months."
But he recommends at any sort of move up by the Aussie, act quick. "Convert half of what you think you're going to need when you do go," he suggests, because it will most likely dip again.
See forexlive.com.
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