Australian dollar soars after RBA keeps interest rates on hold

The Australian dollar surged by 0.0092USD to a little over US74 cents yesterday in its best AUD exchange rate seen since May. This dollar spike came after the Reserve Bank announced interest rates would remain at 1.75%.

RBA Governor Glenn Stevens said the Board’s decision to hold rates “would be consistent with sustainable growth in the economy and inflation returning to target over time” in a statement.

According to Bloomberg, “reports showed the economy is expanding more than analysts predicted” and its data points to there being a “55% chance the RBA will cut its benchmark rate by year-end”.

Given today’s strong AUD exchange rate, Mozo Director Kirsty Lamont said Aussies with wanderlust would be wise to secure their dollars into a prepaid travel card sooner rather than later.

"With the Aussie dollar rising, now more than ever is a great time for Aussie travellers to lock in a competitive travel money deal,” Lamont said.

“If it so happened the exchange rate dropped, travellers would miss out for not acting earlier.”

Travel money scenarios for jetsetters:

Say you are planning an epic Summer holiday to the United States. The following scenarios show how exchange rates can really impact your USD travel money outcome.

Scenario 1: Locking in Aussie dollars now

Even though your holiday is a few calendar pages away, stashing $6,000 worth of spending money into a prepaid travel card on a high exchange rate of 0.74USD would give you $4,440USD.

Scenario 2: Waiting too long and seeing the exchange rate fall

But if you waited until just before you left and the dollar was resting at a lower 0.69USD, you would get $4,140USD, or $300 less. Think of all the Century21 designer bargains you could have snapped up in NYC with that kind of money!

Quick tip: When comparing prepaid travel cards, don’t just look at the exchange rate. Consider ATM fees, signup costs and extra charges for topping up your account while overseas.

What’s your travel money match? Find out at Mozo’s comparison hub.