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

By David Flynn, October 28 2014

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

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Singapore Airlines - KrisFlyer

06 Feb 2014

Total posts 15

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.

Qantas - Qantas Frequent Flyer

08 Nov 2011

Total posts 110

Such foresight...

Qantas - Qantas Frequent Flyer Platinum

07 Feb 2013

Total posts 558

My hero

AlG
AlG

04 Nov 2010

Total posts 674

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.

Qantas - Qantas Frequent Flyer

17 Aug 2012

Total posts 2221

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

Have you tried switching the slaves off and on again?

Qantas - Qantas Frequent Flyer

13 Sep 2011

Total posts 182

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

Thai Airways International - Royal Orchid Plus

15 Jan 2013

Total posts 279

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

Mal
Mal

14 Jun 2013

Total posts 360

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.

Qantas Platinum

04 Dec 2012

Total posts 48

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


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