Sending money overseas? AUD drops sharply against USD, GBP, HKD and SGD amid coronavirus
If you’re an Aussie sending money overseas, we may have some bad news. In light of investor panic around the coronavirus outbreak, the Australian Dollar (AUD) has tumbled significantly - on Monday morning, its value dropped by about 5% against currencies like the US Dollar (USD) and the British Pound (GBP).
According to figures from international money transfer (IMT) provider SendFX, the AUD/USD exchange rate fell by 4.52%. There were similar declines in the AUD’s exchange rate against the GBP (-5.31%), the Hong Kong Dollar (HKD) (-5.83%) and the Singaporean Dollar (SGD) (-4.98%).
This means customers converting AU$10,000 to USD or GBP after Monday’s movements could be losing hundreds of dollars or sterlings on their money transfer. Mozo calculations show you’d be looking at losses of US$299 and £271, respectively.
The slippery slope of the AUD
SendFX’s Hannah Churcher and Foreign Exchange Specialist Chris Broadfoot said the drop in AUD value on Monday isn’t a one-off case, with big falls recorded since the start of 2020.
“We’ve seen the AUD/USD currency pair fall just over 10% since the first of January when coronavirus news started to break. Uncertainty has created downward pressure on the Australian dollar, which is linked to Asia through tourism and exports,” they said.
“The Australian dollar has shockingly fallen 11.6% against the EUR, 9.7% against the GBP and 16% against the Japanese Yen. Volatility has also been seen with the Singapore dollar falling 4-7%, and the Hong Kong dollar dropping 7-10%.”
So who’s affected?
Among those affected by these foreign exchange (FX) movements are expats and businesses with clients or suppliers abroad.
Expats in Australia
If you’re sending money back home regularly to help cover expenses like mortgage repayments and power bills, chances are you’d be getting far less bang for your buck now than before.
For instance, if you’re exchanging your Aussie dollars for British pounds to support your family back in the UK, SendFX’s Churcher and Broadfoot said a weaker AUD means the income you’re earning in Australia is now worth 5-10% less than it did in January.
Aussie businesses with interests overseas
Recent Roy Morgan research revealed 1 in 6 Australian businesses have already been affected by the coronavirus, as quarantine measures impact business-as-usual and market confidence takes a beating.
Importers have been hit particularly hard, and it’s no wonder why, given the fact that movement of goods and parts from China have come to a screeching halt while the AUD/USD currency pair has also slid below 20% in the past 12 months, according to Churcher and Broadfoot.
“This means the cost of goods for businesses that import products would have risen to prices that may be unsustainable as consumer spending continues to decline,” they said.
Your next steps
But it’s not all doom and gloom, as it’s still possible to grab a good exchange rate for your international money transfer. FX specialists like SendFX, TorFX or OFX are great options if you’re looking for experts to help you navigate these rate fluctuations and make the most of any recovery in the AUD.
If you’re still concerned, then check out our article on ways to rescue your international money transfer from coronavirus panic.
Or if you want to find an expert for your next money transfer, make your first stop our international money transfers comparison table! You can also scroll down for a list of providers to keep on your radar.
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