The Aussie dollar may be about to dive, so it could be time to lock your travel cash in
With summer just around the corner many Aussies will already be in the midst of planning their overseas vacations, but a falling Australian dollar could mean that now is the time to exchange travel money before rates drop any lower.
The Aussie dollar, which is currently sitting at 77.8 US cents, dropped below 78 cents last Thursday for the first time in nearly two months - down from a 2017 high of 80.7 cents just three weeks ago.
And the experts are suggesting that it could fall even further, with ABC Business Editor Ian Verrender citing stagnant interest rates as well as falling foreign capital investment and commodity prices as potential catalysts.
“The RBA is now stuck in limbo. It has a mandate to maintain price stability, to keep inflation under control. Normally, that means acting ahead of the curve, whacking up rates before inflationary pressures build,” Verrender said in a recent ABC article.
“Not this time - it will have to let inflation run, to allow incomes to catch up with debt. With no lift in rates for the foreseeable future, the dollar will remain under pressure.”
While a lower dollar is likely to be welcome news for the RBA and the economy as a whole, it will be less so for Aussie travellers trying to get the best value for money on their overseas vacations.
Given the possibility of an even lower dollar in the future, Mozo Data Manager Peter Marshall has suggested that Aussie globetrotters think about locking in an exchange rate sooner rather than later.
“Even a slight drop in the dollar could have a big impact on many summer holiday budgets,” he said.
“If people are concerned about the dollar continuing to fall it could be a good idea to start looking at options now, even a few months out. One way to lock in exchange rates now would be to buy a prepaid travel card and load up funds at the current exchange rates.”
Heading off for a holiday of your own this summer? Make sure you lock in a travel money option as soon as possible by heading over to the Mozo travel money hub and comparing a range of travel debit and travel credit cards.