Favorable currency exchange rate
 

I am looking to go to austrailia later this year. The present exchange is 1.45 australian dollar to one us dollar. Is that a good rate or not favorable to the us dollar? I would like to find a good bargain.

It all depends on your frame of reference. Last January it was 1.72 to 1. This February it had fallen to 1.28 to 1. In the glory years of 2001-2, it sometimes hit 2 to 1.

Hi wesrow!

In recent weeks the Australian dollar has plunged relative to the US dollar. Some months ago they were talking about it passing the 80c US barrier.... now it's below 70c US and still falling. A couple of years ago it went as low as 47c US, and we were, as a result, flooded with American tourists, as that meant that everything they bought was half price.

So where does this leave you? Well, with the world situation the way it is at the moment, I wouldn't like to predict how the two countries' currencies will compare later in the year, but certainly it is true to say that if you buy this week you will get a better deal than last week; in fact, if you buy this week, you will get a better exchange rate than any time in the last eight or ten months. Maybe it will be even better next week, who knows? The bottom line, however, is, that since the prices in the shops look just like the prices in the States, you will be getting about one and a half times the value by coming to Australia right now. Since I am in the position of living here and looking outwards, where I'm paying one and a half times as much, I think you will certainly find us a "good bargain". And, Australia is a nice place, too!

The relative value of the $A is largely determined by movements in the $US. So if you are trying to pick the market then you should be trying to predict the movement of the $US.

In particular if you think US interest rates are going to rise then you might expect the $A to fall versus the $US.

Just like predicting the weather its a risky business.

The current rate at 70c is about the historical average since the aussie dollar was floated in the 80's.

When we started planning our trip to Australia, our dollar (Canadian) was worth slightly more than the AUD. When we visited Australia, it was worth slightly less. Who knows what will happen. It didn't make a huge difference to the amount of money we spent.

Certainly it was easy to figure out what we were spending.

MikeTravels, you'll understand, I'm sure, that those of us on this side of the big ocean don't necessarily remember the time of the "Pacific Peso" as "glory days"! All thoughts of a return visit to the US were shelved, and have stayed that way since the real "glory days" of AU$1=US$0.80. From memory, when the Oz$ sunk to <$0.50 we were being punished, rather irrationally, for the Asian "economic meltdown". The Australian economy has been registering consistently strong growth for many a long year, so as johhj_au says, what happens here hasn't got a lot to do with the exchange rate. We're innocent bystanders.

Neil: Quite right. I understood that my comments were pretty USA-centric. For someone who lives to travel, it was pretty great, as the dollar was soaring against all major currencies. I was able to travel Europe in a much finer style than I was accustomed to. I recognize that it wasn't quite as nice for those of you looking to travel TO the USA. I assume that Australia doesn't do a lot of trade with the US, so I would think it wouldn't otherwise affect your economy that much. But I must admit that coverage of Australian economic issues is completely nonexistant in the US, so I should probably avoid comment on things I know so little about. Howver, if I used that rule there would be precious little for me to discuss.

John: Your analysis is spot-on. The impending rise in US interest rates, while bad news for equities, is a boon for the dollar. The problem is always figuring out exactly how much change the market has already priced in. If I could do that, I'd be spending a lot more time travelling!

Dear Alan,
Thank you for your response. I found it very helpful. I was unaware that prices in australia are similiar to the US. I am looking to come to austrailia in october and go to sydney, melbourne and the great barrier reef. Should I also make an effort to see the outback during my trip? Is it as spectacular as made out in the movies or a dry and dusty desert? I would like to go for 2 to 3 weeks and visit new zealand.I presume that the weather in october, your spring, would rather be comfortable or can it be rather rainy and cold?
Also a thank you to everyone else who replied to my inquiry?

Mike, I support your approach 100%. If I confined myself to matters on which I'm an expert I'd have fallen silent years ago (no doubt to the great relief of my family and friends).

Having said that: I think we run a sizeable deficit on our trade with the USA - i.e. we spend a lot on things like Boeing, Microsoft and Hollywood products, but receive less for our exports, which are still primarily primary products.

The surplus we run with our biggest trading partner, Japan, more or less compensates. China is catching up fast, though, and is bound to supplant Japan before long. Her demand for raw materials such as steel and natural gas is expected to underwrite the Australian resources sector for a long time to come.

China's yuan is pegged to the US$, though, obviously to maintain the price advantage of Chinese products exported to the US. How much this hurts America I couldn't say, given that much of the trade results from US companies relocating their manufacturing bases to China.

Wesrow,

October in the southern hemisphere is like April in the northern hemisphere.

Christchurch, New Zealand is about as far away from the equator as Boston is, so that'll give you some idea of what spring weather there might be like.

People visit New Zealand at all times of the year, and love it. If you go there, just be aware of the realities, and make appropriate preparations as to clothing, etc.

Melbourne's weather can be lovely in October, but it also can be cool and wet with a cold, cutting wind. Even Sydney can be cool in October.

We have lived in Melbourne, and have visited Sydney at various times of the year. My husband visited both cities in November / early December 2003. He encountered cool weather in both places, and it warmed up only a couple of days before he left.

October is a perfect time for visiting the Great Barrier Reef.

I've never been to the Outback, so cannot say whether or not it's worth visiting. (I've been to other deserts, though, and have found that they have a stark beauty.) Here's a previous discussion thread about the area around Ayers Rock / Uluru:

http://www.fodors.com/forums/threads...p;tid=34486732

You'll note that Paul_S (who lives in Alice Springs) says that the Grand Canyon, Bryce Canyon, and the painted desert are better than the area around Ayers Rock. (But as travel agent Melodie says, this is a very individual issue.)

I like Kimbis's idea of Playing Postie for a Day, and accompanying the mail from Cairns to Outback communities in Queensland. That is a suggestion that Cairns B&B owner Pat Woolford has made several times here. That is a greater ambition for me than visiting Ayers Rock.

Regarding the duration of your trip and what you'll manage to cover in 2 or 3 weeks......

You need that amount of time to see New Zealand alone. New Zealand is the length of the US west coast from the Canadian border to the Mexican border.

Australia is the size of the lower 48 American states, so obviously you can't see all of it in 2 or 3 weeks either.

If I were you I'd choose NZ or Australia but not both. Given the time of year, I'd go with Australia. I personally would prefer to visit NZ in January or February, even if my snow boarding son did enjoy skiing there three Julys in a row.

I would spend six days each in the Cairns area (or some other point of access to the Great Barrier Reef), the Sydney area and the Melbourne area. Add travel time for getting from one to the other, and you've pretty much used up 3 weeks.

There are some people who come here and say that, once they've travelled that far they just HAVE to include New Zealand in their trip. They simply will not be talked out of including both countries in one vacation. If you belong to that school of thought, even against my advice, then I suggest you cut out Melbourne and devote a week to NZ South Island. (I've never been to NZ, except for refuelling at Auckland, but have heard from several "real life" friends as well as Fodorites that, if one can only see one of New Zealand's islands, South Island is the more dramatic of the two.)

In Far North Queensland you could visit the Great Barrier Reef (1 day), tropical rainforest (1 day), Undara Lava Tubes (2 days), and assorted other activities (another 2 days).

You could spend 3 days seeing Sydney, 2 days seeing the Blue Mountains to the west of Sydney, and one day seeing the wine producing Hunter Valley to the north of Sydney.

You could spend 2 days seeing Melbourne, 2 days driving the Great Ocean Road, 1 day visiting the Dandenong Ranges, and another day visiting the Yarra Valley.

Hope this helps.

Timely message for us - daughter traveling to Australia in 5 weeks, wonders WHERE to exchange her USD for Australian ones - here or there? Thanks.

Inthechips, it's best for your daughter to use a debit card to withdraw cash from ATMs in Australia.

To be on the safe side, she could get a bit of Australian cash before her departure, so that she'd have enough for a cab ride and a couple of emergency purchases upon her arrival in Australia.

Although it would be a good precaution to have that emergency cash, she most likely wouldn't need it, as she'd be able to use an ATM in the airport at which she landed.

There have been quite a few previous discussions about the merits of travelers checks versus debit cards. A word search for "ATM" brought up several threads, such as this one:

http://www.fodors.com/forums/threads...p;tid=34413981

I forgot to add that most people use credit cards to pay for their larger expenses, such as their hotel bills, and use cash (obtained from ATMs) for smaller purchases, entry fees, etc., and in situations in which credit cards are not accepted.

inthechips: You will find that exchange rates for the US$ will be better in Australia. In fact, this is pretty much always the case for every foreign currency. I presume this is because there is a greater supply of foreign currency in the country that prints it, although it may just be because US banks tend to discourage exchange. I don't know.

Neil: Interesting info on the Australian trade. I'm told that we are supposed to be happy about American companies moving their manufacturing plants to China and elsewhere, but I've never been able to work up much ethusiasm.