Australian Dollars
 

What do you think about getting some Australian dollars now before our trip in Jan. '09. The exchange rate is great right now, $1.00 = 1.459 AUD and who knows what it will be like in the new year. Is this a good idea? Thanks.

It probably wouldn't hurt to stockpile some Suzy, unless the commission you'll pay on the exchange will make the rate considerably less attracive.

The drawback of course will be that you'll be starting your trip with a pocketful of cash instead of getting cash as you go.

You might consider paying for as much of your trip now as possible to take advantage of the good rate - hotels, cars, etc. I'd only do this if you're confident that you won't need to cancel or change your bookings though.

We're Americans living in Australia and we've been using our US credit card and ATM at every opportunity to take advantage of the good exchange rate (we're on the US payroll). In the three months we've been here, we've seen the rate go from .88 in August to a low of .61 last Monday. It's been up and down like a yo-yo. On our credit card statement we've noticed that we've gotten as many as three different exchange rates on any given day.

As if yesterday, the rate was back up to .69, so it seems to be inching back up.

We regret that we didn't wait awhile to make a sizable transfer from our US account into our AU account - we could have saved a bundle if we'd done it at .61 instead of at .88.

Oh well, so it goes.

And the rate might just head down again for if anybody thinks this economic crisis is ended, they had better have another think.

Sure there's been a little jump called Obama Euphoria but the reasoning (given) the Australian $ has plummeted is that's Australias economy is very much dependent on exports of iron ore and coal to Japan and China, and we're like last domino if you like - demand for prodeucts in USA and other markets dwinfles > Japan and China slow down production, lay off workers (already happening) and reduce imports of raw materials (already started) > Australias earnings take a dive and subsequently our $ too it seems.

I have seen economic circle talk of it even going less than 50 cents.

And Mel, the exchange rate had topped at .98 and if you had an Australian account/credit card, it would not make you any worse off for you could just pay it off by $US transfers - maybe some money to be made that way (and lost).

I'd be waiting myself Suzyque for if the rate goes down, you win and there's certainly less chance on the up side, and even if it did move that way a little, just think of it as you're still a long way in front of where you might have been.

Hi Suzy

I tend to agree with Melanie on this one. Pay as much as you can in advance and I often arrive with a truckload of cash as my sister, who works in a bank, can get my cash fee free!

I just use a neck pouch and have no problems carrying a large amount of cash.

I'd certainly be getting some cash now if the rate is in your favour.

But please bear in mind that if any of us actually knew the correct answer to your question we could get very rich.

As it is we're all guessing - experts and amateurs alike - and your guess is as good as anyone else's.

As Neil has just said you can either guess, gamble or attempt to make something of an assessment as to which the economy is going to run.

Call me a pessimist if you like in the face of some Obamaoptimism but on todays internet headlines this morning (since removed!, makes one wonder) there was a report of the Bush Administration working on the borrowing of a sizable chunk of that "bail-out" loot! and then when you couple that with the British PM having been in Saudi Arabia seeking money for the IMF, my read of this recession in a few countries is that not before too long, the word global depression is going to be about.

Having a look at our own economic events of the last few days, the government here is already admitting to something like $40B less in revenue projected for current financial year, the major childcare organisation is now bankrupt, putting something like 16,000 jobs and 100,000 care places at risk and though the government heavily subsidise childcare they are not looking at running it - all the mothers working could be affested, car sales are down 11%, Telstra and other organisations are announcing job cuts, and so all up it is not a rosy scene.

Your decision on paying now but what that recommendation is based on I'm buggered if I know, especially when it is not all that long ago 50c/$1 was considered something normal.

Hey stormbird, what bank is that your sis works for?, sounds a good deal.

That was supposed to be affected above and not affested, but no doubt it could be a new word given the infestation of travel by economic matters - just also noticed the Dow dropped something like 500 points today did it?

And even Queen Lizzy (not the one in Tassie, but over London way) is getting in for her two bobs worth wondering why all this was not seen in advance!

And the other thing you need to think of Suzy is that it is not unknown for travel agencies nor tourist businesses to go belly up, and if you pay ahead it could just be to one of those that goes belly up.

Depending where/when in January, you may not need to book ahead and in fact could benefit from discounts competition given that a lot of Australians may well be tightening their belts a bit more.

I agree with Bushranger that its probably heading down, I read last week that 40 cents per US$ was a possibility, but the reality usually means something in the middle, so 50 cents sounds reasonable

Geordie

Well, if we only knew what was going to happen we'd be more expert than "the experts". I too read that the ozzie dollar is likely to dip below 50c to 1USD in the new year.

That's scary. How can a currency lose almost 50% of its value in six months? The system is broken.

Now on a personal note I wish very much that I had taken out $300-400 in July and bought USD then for a cash float in places where it's useful to have cash. But I didn't.

Suzyque, if you were going somewhere with a low cost of living, where a place to stay could be under (or well under depending on how you travel) $50usd, it might be worth it, but if you are staying in mainstream hotels, then I personally would not want to be carrying that much cash around.

I'm torn, because when I travel I spend my aud earnings, but my savings (that I need to buy a property) are in gbp.

swings and roundabouts.

Cheers.