Jetsetting to the US? Consider locking in your exchange rate before Aussie dollar drops further
Article by Kirsty Timsans
The Australian dollar experienced a sharp decline last week and experts have tipped it will fall even further against its US namesake in the coming months.
Atul Lele, chief investment officer of Deltec, told smh.com these predications of a plunging AUD are not that “bold”.
“The Australian dollar could go below US 70c in the next six months quite easily. More importantly, it’s not bouncing back any time soon. I can easily see a scenario where it goes into the US 50s,” he said.
Although Lele predicts rising global growth, he said that this growth will be lost upon commodity-focused economies like Australia’s which faces a collapse in export revenue amid declining iron ore/coal prices and investment from large international mining companies.
While the falling dollar may be a positive result for some exporters, it’s certainly not for Australian jetsetters keen on a trip to Vegas on the Big Apple in the coming months. So with the dollar not expecting to recover any time soon, should you start buying up US dollars now and put them into a prepaid travel card or set up a foreign exchange account?
The Australian dollar is currently trading at 74 US cents. At this rate, if you were travelling to the US with AUD$5,000 you would get around $3,700. If the predictions of the currency analysts do materialise and the dollar does drop below 70c, for instance 69c, this would only buy you $3,450 - that’s $250 less spending money.
So if you’re travelling overseas soon, it might be a sensible idea to start putting some money on a prepaid travel card to safeguard yourself against any further drops in the dollar. When choosing a prepaid travel card, it’s important to consider cards that don’t charge for reloads especially if you’re planning to add to the card over an extended period of time.
You can compare the rates and fees of major providers of prepaid travel cards using Mozo’s search engine here.