Aussie dollar climb to US75 cents a win for those travelling overseas
Article by Roisin Kelly-GoldsmithThe Aussie dollar rose to US75 cents overnight as part of a series of exchange rate movements that have been favourable since last week. This comes as the exchange rate for the AU dollar was at a low point in January at only US68 cents.
While the dollar has been kicking goals this week, RBA board member Phillip Lowe said the Aussie is depreciating overall.
Lowe made a keynote speech on the resilience of the Australian economy and said that the country’s growth is finding balance partially thanks to exchange rate movements.
“The effect of the exchange rate depreciation is evident in the improved conditions and prospects for a number of industries, including tourism, education, agriculture and parts of manufacturing.”
“Just as the earlier appreciation helped the economy avoid overheating during the resources boom, the depreciation is now helping the economy adjust to lower commodity prices and lower investment in the resources sector,” said Lowe in the speech.
The Commonwealth Bank seemed to agree in a report this morning which noted the Australian dollar would struggle to stay high due to “disappointing trade data out of China.”
Currency analysts at the Commonwealth Bank forecasted earlier this year that the AU dollar will drop to US65 cents by the end of March before recovering to around US70 cents by the end of 2016.
How Aussies can take advantage of the AU dollar surge
For Australians planning a winter escape abroad, this could be the perfect time to lock in a competitive exchange rate on a prepaid travel card, before the Aussie dollar drops, as predicted.
Scenario: Travel money outcome for a US holiday
Say you’re going to enjoy a mid-winter break in the states with a friend. Given the strong AU dollar might not last, loading AUD$8,000 into the Cash Passport Prepaid Currency Card with a high exchange rate of 0.71, at the time of writing would secure you a tidy sum of US$5,680 for your travels.
That rate combined with the travel card benefit of having no ATM withdrawal fees while you’re there could give you just the confidence you need for a budget-friendly vacay.
But if you waited until the end of the month and the Aussie dropped to 65 cents against the US dollar as predicted by CommBank currency analysts, you would only get $5,200 out of your $8,000 Australian dollars in US currency. The $480 you missed out on for not locking in your dollar sooner could have been put towards shopping up a storm on Rodeo Drive!Do you have a serious case of wanderlust and want to remedy it by locking your funds into a prepaid travel card now? Visit the Mozo prepaid travel card hub to compare features and rates from a range of providers.