How to beat the falling Aussie dollar

How to beat the falling Aussie dollar

This time last year the Australian dollar was sitting at over US80c. Fast forward to present day and the dollar has fallen significantly to just US71c.

The dropping dollar may be good news for the likes of economists, such as RBA Governor Glenn Stevens who said he wanted to see the dollar drop below US75c to achieve balanced growth. But it isn’t so great for those who plan to jetset overseas, shop from international websites or send money back home in the coming months.

While there’s not much you can do about the falling Aussie dollar, which btw is tipped to fall even lower to under US60c, there are some thrifty tactics you can adopt to get the biggest return on your Aussie coin:

Overseas jetsetters and shoppers: Lock in your rate early with a prepaid card

If you’re planning on shopping online or travelling overseas this silly season you could consider locking in your exchange rate now on a prepaid travel card. Check out this scenario to see how far your dollar could go by locking your exchange rate in early:

Say you are planning on jetsetting to the US in the New Year and wanted to take $6,000AUD worth of spending money with you. With the current exchange rate of US71c you would be able to load around $4,260 onto your prepaid card. By comparison if you left organising your travel money to the last minute and found the dollar had dropped to just US65c, you would only receive around $3,900. That’s potentially an extra $360 in your pocket, just by locking in your exchange rate early that you can use towards spending at the Bloomingdale’s sales.

Sending money back home: Choose an online currency exchange provider

Want to send your family back home some festive love this Christmas? Well, our advice is to look outside the big bank providers in Australia at currency exchange providers like World First and OzForex, as you’re likely to get more bang for your buck.

Don’t believe us? Check out the table below, which compares the cost of transferring $US10,000 with the big 4 banks compared with some of the top currency exchange providers in Australia:

From To Cost Provider/Timing Amount received
AUD USD $14,043 World First, 1-2 days USD $10,000
AUD USD $14,051 TorFX, 1-2 days USD $10,000
AUD USD $14,071 HiFX, 1-3 days USD $10,000
AUD USD $14,071 OzForex, 1-2 days USD $10,000
AUD USD $14,900 Big 4 average, up to 5 days USD $10,000

 

As you can see the best deal when we crunched the numbers was offered by World First costing you $14,043, compared to the average cost of transferring through a big 4 bank of $14,900 (a difference of $857).

If that isn’t incentive enough, the transfer period is generally much shorter with foreign exchange companies. For instance, World First has a transfer period of up to two days, compared to the big four banks who generally make you wait up to five days for the international money transfer to finally go through.

It’s important to note that the best price offered for international money transfers will vary depending on the amount you’re transferring and the currency you’re converting the cash into.

Compare today’s exchange rates

Mozo’s international money transfer comparison tool compares over 10 currencies from Australia’s leading foreign exchange providers. Rates are updated hourly, see here for today’s rates.

How to beat the falling Aussie dollar was last modified: November 17, 2015 by Rebeccah Elley

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2 Comments - Write a Comment

  1. A very useful post. Thanks a lot Rebeccah for sharing this. Can you tell me how frequently there will be changes in the Australian currency in the international level?

    Reply
    1. Mozo

      Hi Ricky,

      The Aussie dollar depends on a lot of things, not only in Australia but overseas as well (e.g housing market, share market, inflation). It is currently at a low point compared to what it has been over the past 2 years, so could remain relatively stable in the short term. The dollar is also influenced by the RBA cash rate, and if that were to be cut again in the future that would put downward pressure on the value of the AUD.

      But it remains largely impossible to tell what exchange rates will do in the future, you’d need a crystal ball to find out.

      Thanks

      Rebeccah

      Reply

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