Good time to plan an international holiday with Aussie dollar strengthening
There’s good news for all those planning an overseas holiday. Looking at the resurgent Australian dollar, this could be a great time to go for an international vacation, according to news.com.au.
For the first time since January, the local currency went over 80 US cents on Wednesday. This jump was supported by stronger iron ore prices and weak economic data out of the US. If the rising trend is something to go by, the news could only get better, with speculation that the dollar could reach 85 US cents.
“It’s quite conceivable we could push up to ... around 84 or 85 (US cents) before the downswing resumes again,” AMP Capital Investors chief economist Shane Oliver told AAP.
This could however, hit companies that have international exposure, according to Dr Oliver. For instance, exporters, farmers, local tourist operators, miners and higher education providers would not be too happy with this rise.
The dollar would be a “hot topic”, Dr Oliver said, for Reserve Bank Governor Glenn Stevens and his colleagues at the RBA’s May 5 board meeting. “I think it’s a very strong argument for the Reserve to ease again,” he said.
A further rise would also probably disappoint Mr Stevens, who has said he would like the dollar to be around 75 US cents to help fire up Australia’s economy.
One of the driving factors pushing the local currency higher, according to analysts, was data showing US consumer confidence levels diving to their lowest levels so far in 2015.
They also pointed to higher iron ore prices, which in China have edged close to the $US60 a tonne mark.