How you can benefit from a strong Aussie dollar
These days we're getting great value when it comes to converting Australian dollars to US dollars - and that means that there are some great bargains to be had. We take a look at three ways you can make the most of a strong Aussie dollar.
In recent weeks we’ve all watched with interest as Australian currency started performing more and more strongly against the US dollar – breaking records and making economists on both sides of the Atlantic dizzy with anticipation as they speculate the impact of a strong Aussie dollar on the world economy.
The world is your oyster
If you’ve caught the travel bug, now is a great time to pack your bags, as the strong dollar has opened up a whole world of opportunities for many families. And it’s not just holidays to the States that could cost you less right now – our dollar is stacking up well against many of the world’s stronger currencies, including the Yen, the Euro and the British pound, making all kinds of tourist destinations more affordable. If you’re not planning on travelling right now but had plans to head off in the next 12 months or so, it could be worth booking and paying for your trip now to lock in low prices while they’re available. If you are heading off soon it’s worth finding out whether you’ll get bigger buying power by paying for as much as you can once you get overseas rather than up-front now with your travel agent. Paying here in Aussie dollars might not get you the best deal right now, especially when it comes to accommodation and tourist activities. If you’re staying closer to home, the good news is that because airlines pay for fuel in US dollars, in theory, all flights should become cheaper if airlines choose to pass their fuel savings on to customers.
We’ve all been frustrated by conversion rates when shopping online, and a strong Australian currency can equal big online savings as the prices we see are more closely related to the prices we’ll pay after we convert Australian dollars to the currency we’re shopping in, especially if we’re buying from countries like the US and UK. But while the prices of the actual products might be going down, you still need to be aware of the additional costs, such as postage, handling and shipping costs. Also, remember to make sure that any products you buy from overseas can be used here in Australia – there’s no point getting a ‘cheap’ electrical product from the US if you can’t use it when it gets here!
Shop till you drop!
We should also expect to see lower prices on products while we’re shopping here at home, with the cost of importing goods from the US, Europe and parts of Asia also going down … but this will depend on whether retailers choose to pass their savings on or increase their profit margins. Everything from cars and petrol to clothes, books, furniture, and even electricals, should get cheaper. Lower wholesale prices means bigger margins for importers, so don’t be afraid to haggle to get a better deal.
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Wilson Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.
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