Overnight our little Aussie dollar was not so little, managing a strong performance against most major currencies. Before we delve into the market factors behind this strength, let’s just have a quick lil powow and see what this actually means for Aussie travellers.
Let’s say you are planning a trip to the following countries, and exchanging $2000 AUD with Travel Money Oz on the 16th of October compared to today, the 16th of November.
Exchanging $2000 last month would have got you around $1389 USD. Today, the same amount gets you $1407.60 USD - a bonus amount of $15.60 USD. Sure, that might not sound like much, but in the Big Apple it could mean an extra 7.5 streetside hotdogs. Delicious and authentic. Hell, shout yourself a cawfee while you’re at it.
Arigato gozaimasu. Exchanging $2000 in October gave you 153,307.80 JPY. Today it gets you 157,979 JPY. That’s a bonus of 4671.20 yen, or about 40 sushi rolls.
On the 16th of October, you would be heading to Europe with 1183Euro for $2000AUD. Today you would be jetting off with 1230.60Euro.
Miscusi, that’s an extra €47.60! A.K.A 23 croissants people! That is essentially a trip’s worth of croissants, or five days worth for seasoned pastry addicts like myself.
This is the stickler. As most seasoned travellers know, exchanging AUD to GBP involves the heartbreak of basically halving your funds, so any rate hike is a bonus.
Exchanging $2000 on the 16th of October gave travellers around 1041.20 pounds. Exchanging today will give you 1094.60 pounds - an extra 53.40 pounds. A bonus like that is worth celebrating, so why not shout yourself to 10 extra pints at the pub with your extra cash.
But wait, there’s more! Purchase online today and take advantage of our Click Frenzy flash sale. Hurry, the sale ends at midnight tonight.
Back to our regular program - what has the AUD been up to?
At home, positive labour market data saw Australian employment numbers come in at 32,800, with an unemployment rate of 5%. Both figures were better than market expectations, which were 20,000 and 5.1% respectively.
With these numbers being associated with a tightening labour market, we could expect to see a large increase in wage growth, despite it being fairly subdued at the moment.
The culmination of this positive data could potentially point to the market believing the Reserve Bank of Australia’s (RBA’s) next move in interest rates will be an increase, which is much sooner than previously expected.
How would this affect exchange rates? An increase in Australian interest rates would give foreign investors greater return on their Aussie investments. Greater demand means more demand for the AUD, which will subsequently increase its value.
News from around the world
On the global stage, the biggest news surfacing overnight was surrounding Brexit.
Yesterday was a big day in UK politics, seeing the UK Minister for Northern Ireland (Vara), the UK Brexit Secretary (Raab) and the UK Secretary of State (McVey) all resign in protest against a draft Brexit agreement.
The level of uncertainty around this whole situation is putting a lot of pressure on the GBP with AUD/GBP being up quite a lot overnight (hence the extra 10 pints mentioned above). Key uncertainty stems from the following:
- if and when a vote on the withdrawal agreement will occur
- whether the withdrawal bill will be passed by both houses of Parliament
- who could become Prime Minister should Theresa May resign or be challenged
- if there will be a second referendum on Brexit as a whole and/or an election
Market volatility is expected off the back of this uncertainty, so it’s definitely worth keeping an eye on the news and exchange rates if you are planning on purchase GBP in the near future.
If you are planning your Christmas holiday and want to keep tabs on how the AUD is performing against your preferred currency, sign up for rate alerts
and be notified when the currency you’re after hits your desired rate. Alternatively, if you need to purchase soon, add Rate Guard
to your transaction in store and we will refund you the difference, should the rate improve within 14 days*.
Sounds like a deal if ever I’ve heard one, especially if it means some extra Parisian pastries.
This blog is provided for information only and does not take into consideration your objectives, financial situation or needs. You should consider whether the information and suggestions contained in any blog entry are appropriate for you, having regard to your own objectives, financial situation and needs. While we take reasonable care in providing the blog, we give no warranties or representations that it is complete or accurate, or is appropriate for you. We are not liable for any loss caused, whether due to negligence or otherwise, arising from use of, or reliance on, the information and/or suggestions contained in this blog.
All rates are quoted from the Travel Money Oz website, and are valid as of 16 November 2018.