AUD on the decline... Should I exchange now or wait?

[cattlikewoah]

So the bloody AUD has dropped 10c against the USD in a matter of weeks - in fact, yesterday 1$AU bought 88cUS. Today it fell to 86c.

Having just spent 7 weeks in the USA and having such a GREAT exchange rate (somewhere in the mid-90s), I'm scared that the AUD is going to keep going on a downward slope.

One source has told us not to be surprised if it drops to 78c... another source has said that the AUD will continue to slump until the economy is strong enough to pick up again - this would be at least until the next financial year.

So this is my dilemma - my travel plans are as follows:
Japan in Nov 08,
Hawaii in Feb 09,
Europe/USA/Mexico in May 09.

I'm leaning towards converting some money now to Japanese Yen (AUD is also doing poorly against that)... and maybe some for USA.

My knowledge is very basic and I'm just taking advise from all my nerdy finance-related friends. I need help to work out what is the best course of action.

I considered Cash Passport so it stays at a fixed exchange rate, but I heard it isn't that good and it needs to convert to USD before going to Yen for example.

I looked into Westpac 0% commission on currency conversions (also offers 1cent more than Travelex).

Help help help! I want to know what to do before the $ goes dowwwwnnnn....

[mermaidnz]

OMG im in the same boat!!

do i change my yen now, or wait till december? i dont know anything about this stuff, a few weeks back the aud/yen was at 103.0 so we would have MADE money shoulda done it then

[cattlikewoah]

Originally Posted by mermaidnz

OMG im in the same boat!!

*throws you a lifesaver*
It TOTALLY sucks that its going down.

It was only like 2 weeks ago that the AUD was being all high and mighty! I wish I were ignorant to the Australian/International economy.

[MolsonGirl]

I'm not going to lie... I NEED your dollar to keep dropping.. it's done nothing but go up against the Canadian dollar since I've been living here... so to pay my tuition i need the dollar to go down and save me a couple grand!

[aliz]

I'm so glad I went to NY when I did... I just wish the aussie dollar would stay high so I'd have an excuse to go back quickly!
and stuff on amazon was getting so much cheaper!!

[SGRHewitt]

I watch exchange rates everyday(I get an updated email)... The closest I saw was 1.00(USD) = 1.01(AUD)... Thanks to lowering of oil prices, and the recent trend of the dow jones index going up, things have changed back. I remember it being 1.00USD for 1.14AUD last December, and it went all down hill from there.

Just remember, your dollar will go alot further here, than in Australia. Even with the exchange rate, I'm sure you could save on things here. Budget air is rather cheap here(not European cheap, but cheap), fuel is stil relatively cheap, food is cheap... Trust me, even though you feel cheated, the cents that you lose, are made up probably two-fold.

And I agree with Molson, I need the Australia dollar to continue it's decline .

Another though... With the 14cent change in the Australia dollar, 10 cent change in the Euro, and about 12 cent change in the pound when compared to the dollar. I don't know what happened to our 'recession', but this almost makes it seem like its disappeared. I haven't seen the pound-to-dollar this low since I went in 2005. All I know is, 10-12% change in a matter of weeks is shocking. There was lots of money to be made in the currency exchange trade.

[maracle]

I heard Japan is going into recession so I would think that would devalue their currency if there is inflation there. So I'm not sure changing to Yen will help much.

But predicting currency is really hard, I wouldn't trust anyone's advice on what may happen.

[offhegoes03]

Wow, last time I checked currency exchange rates, it was about 1.57 Euro to the US dollar. That was about what it was when I went on my trip at the beginning of the summer, and now it's 1.49 Euro to the US Dollar!

[Elizabeth]

Is there some sort of ritual I can perform so the god of the USD-Euro exchange rate so they can continue the euro's decline?

[offhegoes03]

http://www.theonion.com/content/news...lympians_bring

:D

[MolsonGirl]

Originally Posted by maracle

I heard Japan is going into recession so I would think that would devalue their currency if there is inflation there. So I'm not sure changing to Yen will help much.

But predicting currency is really hard, I wouldn't trust anyone's advice on what may happen.

Everyone is going into recession because of the US housing crisis/massive debt issue (I'm no financial analyst but this is what I hear).

Having said that with the ebb and flow of the currency market I would definitely say the Aussie dollar is going ot drop to the US a bit more so maybe you can transfer some money into US while your there? And I suppose in the EU I would grab some Pounds... they're always a benchmark currency.

and thats my two cents although again these are just guesses of a fellow traveller!

[LiveFreeorDie]

No one can predict what will happen with exchange rates tomorrow, never mind next week or next month. The economic factors that drive exchange rates are varied and complex. Lots of people play the forex game as an investment option but at the end of the day you might as well put your money in the slots at Vegas. I would just sit tight, not worry too much and exchange your cash when you need it, at the start of your trip. It might go up, it might go down or it might stay the same but it is a total gamble to buy now versus later and expect to come out on top. If you wouldn't get killed with transaction fees, the best strategy to minimize impact of a falling currency would be to exchange your money multiple times between now and your trip, maybe once every couple of weeks. That way you would average out the rates you get...it would soften the impact of a falling rate but if the currency goes up you get a bit of that benefit as well. The major negative with this is most banks and other currency exchange places charge high fees per exchange which means you may be even farther in the hole by exchanging several times. It sounded like you were thinking of exchanging maybe half now and half later? That is probably an okay strategy as long as you don't killed with the transaction fees. Good luck!

[SGRHewitt]

My theory is, because most of the worlds currencies are pegged to the dollar. Mainly because this country is financed more by foreign entities than domestic. That to see the dollar drop, would not only hurt us, but hurt the global economy more than any currency(including the Euro). Who funded the stimulus package that put a $400 check in your mailbox this summer? The Chinese. Over 40% of business done in the U.S. is Japanese(directly or related to). And I think I remember reading where 80% of the skyscrapers in New York City are foreign owned.

Is this a bad thing? I'm not sure so it is. Yeah we'll see recessions and probably a depression again. But because of the vast amount of foreign investment, it would be in the global economies best interest to have the dollar strengthen, rather than continue its decent. At least thats my hope.

[SGRHewitt]

Originally Posted by LiveFreeorDie

No one can predict what will happen with exchange rates tomorrow, never mind next week or next month. The economic factors that drive exchange rates are varied and complex. Lots of people play the forex game as an investment option but at the end of the day you might as well put your money in the slots at Vegas. I would just sit tight, not worry too much and exchange your cash when you need it, at the start of your trip. It might go up, it might go down or it might stay the same but it is a total gamble to buy now versus later and expect to come out on top. If you wouldn't get killed with transaction fees, the best strategy to minimize impact of a falling currency would be to exchange your money multiple times between now and your trip, maybe once every couple of weeks. That way you would average out the rates you get...it would soften the impact of a falling rate but if the currency goes up you get a bit of that benefit as well. The major negative with this is most banks and other currency exchange places charge high fees per exchange which means you may be even farther in the hole by exchanging several times. It sounded like you were thinking of exchanging maybe half now and half later? That is probably an okay strategy as long as you don't killed with the transaction fees. Good luck!

The problem with exchange rates is, you either get charged commission, or they give you an exchange rate that can be 2-4 cents off what the market is.

Is it worth it to exchange now? Yeah probably, especially if you feel like your economy is on the fringes. Just shop around, check every place you possibly can. And stay as far away from Travelex as possible. Their sole means of profit is from exchanges, thus why they charge high commission or deviate from the market so much. I would stick to credit unions(if they exist abroad), banks, or bureau de change which gave me the best rates in London when I needed to exchange cash. But definitely shop around.

And I agree with LiveFree, if you can find a place that charges little fees/stays close to the market rate. Go with them. And do a couple of transactions over the months heading up to your trip. I think breaking it up into thirds would probably be safest, or even half now half later.

[SGRHewitt]

Wow... It just keeps declining. The US Dollar is now $1 to $1.19 Australian. Thats the lowest I've seen since I started paying attention back in November.

Makes me wonder if I shouldn't transfer some myself. Thats almost a 20% change in less than a year, and to think just two months ago it was almost 1:1.

[voyd]

Originally Posted by SGRHewitt

Wow... It just keeps declining. The US Dollar is now $1 to $1.19 Australian. Thats the lowest I've seen since I started paying attention back in November.

Makes me wonder if I shouldn't transfer some myself. Thats almost a 20% change in less than a year, and to think just two months ago it was almost 1:1.

It's actually way worse than that - because the USD itself has also tanked over 20% in the last 3 years.

So, combined with that you could say the AUD has actually lost nearly 1/3 of it's value.

[SGRHewitt]

Yeah, I'm just looking in the short term for my own benefit. I know our currency is shit . Thanks to oil going down, we're seeing decent boosts on the market and in turn a boost to our currency. However, as soon as the winter season hits and gas is back up to 4.00.... Bye bye to the strengthening dollar?

[Dig]

Well said Mr. Hewitt. The dollar is directly tied to the cost of oil. As it drops the dollar strengthens and vice versa. As long as oil continues to not go up, the dollar will stay flat.

Oh how I miss the .75 EU to the dollar and wish I had jumped on the band waggon.

[cattlikewoah]

This whole currency thing does my head in.

So originally when I posted this I was going to get off my ass and actually change some money over... But I got lazy and it has fluctuated and dropped 5 cents since I looked at it... I need USD for Feb (Hawaii)

But right now though I need Yen (Japan in November). But I can't understand the Yen against the AUD... Can anyone enlighten me on this please?

I know some people have said don't bother changing yet but it keeps declining... I don't want to have a crappy exchange rate... I'm a dummy when it comes to these things :s

[mermaidnz]

i might change my yen soon... its hovered around 90 for awhile, and stupidly, i should have gotten it changed a few weeks back when it was dollar for yen then again, i shoulda done that with the USD too.

i wish i had a magic wand so i knew what to do!!!