Aussie dollar slumps: what's your travel money strategy?

Aussie dollar slumps: what's your travel money strategy?

These haven't been the happiest of months for the Aussie dollar – or overseas-bound Aussie travellers, for that matter.

Measured against the global benchmark of the US dollar, the Australian dollar has plummeted from 95c in July to around 88c today.

There have been recent drops against the Euro (€0.76 to €0.69 since September) and the British pound (£0.57 to £0.54 since September), and earlier this month we even dipped close to parity against the Singapore dollar.

But the kanga has been loosing its bounce for more than the past few months. According to data compiled by OzForex, the Aussie dollar has lost more than 20% of its value across the past three years.

OzForex reports a "big surge" in applications for travel money cards as travellers look to lock-in foreign currency at current rates rather than risk further dips.

"We would usually see a drop off in travel card activity in July-September, as it's between the key June and January travel seasons" says Margaret de Polignac, Head of Product of OzForex.

"We've also seen a huge spike in people buying Japanese Yen, three times higher than usual, possibly because October is considered an ideal month for travel due to Japan's lovely autumn weather."

There's typically a seasonal pattern to currency purchase as well, with Euros being loaded on ahead of the Northern hemisphere summer holiday season in June, whereas demand for US dollars peaks in the run up to Christmas.

Prepaid travel money cards are enjoying a huge surge in popularity, with MasterCard predicting Australia's prepaid consumer travel card market will reach $2.9 billion by 2017.

In light of the Aussie dollar's continued drop, what's your travel money strategy ahead of your next international trips?

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David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
 

9 comments

  • Mayan

    Mayan

    28 Oct, 2014 10:16 am

    Given that the decline was obviously going to occur, I put the majority of my portfolio in foreign currency denominated assets quite a while ago, and have also used forex futures to hedge the rest. 

    It beats whining about it.

    No member give thanks

  • tmsmile

    tmsmile

    28 Oct, 2014 10:46 am

    Such foresight...

    No member give thanks

  • Doubleplatinum

    Doubleplatinum
    Banned

    28 Oct, 2014 11:19 am

    My hero

    No member give thanks

  • Al Glidden

    AlG

    28 Oct, 2014 11:58 am

    I have a similar strategy to Mayan, except that I had my indentured slaves change most of my cash reserves into gold. Some complained how heavy the gold bars were, so I had them executed on the spot. It's so hard to get good help these days.

    No member give thanks

  • watson374

    watson374

    28 Oct, 2014 02:44 pm

    "It's so hard to get good help these days."

    Have you tried switching the slaves off and on again?

    No member give thanks

  • woganfan

    woganfan

    28 Oct, 2014 03:10 pm

    Come and see the violence inherent in the system, help help were being repressed.

    No member give thanks

  • abudhabi1

    abudhabi1

    28 Oct, 2014 11:07 am

    Going somewhere that doesn't need American Dollars would be a good start and buying up when the rate is good.

    No member give thanks

  • Mal

    Mal

    28 Oct, 2014 11:30 am

    Any time I see a news report that the Aussie dollar has ticked up I check the exchange rates for the countries I most often visit and will often buy some of that foreign currency or load up my travel money card (I use the Qantas Cash card). The chances always seem greater that our dollar will fall instead of rising further and on the whole, over the course of a year, I think I'm better off swapping a few hundred on each increase.

    No member give thanks

  • Marc

    Marxx63

    1 Nov, 2014 11:15 am

    This is a problem I cannot afford, for I have no money

    No member give thanks

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25 May, 2019 03:51 pm

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