Australia, New Zealand & the South Pacific - Advice on buying currency for March trip to AUS?

I guess my question is basically similar to the one in this recent thread (http://www.flyertalk.com/forum/showthread.php?t=875096&highlight=exchange) about NZ...

Generally, we never buy currency for trips... I guess I started thinking about it because a) I just saw the US-AUS exchange rate is at a relative high right now; b) there is a thread in MilesBuzz about buying Travelers Checks online in foreign currency :D

Altho none of us have crystal balls.... Any opinions as to whether getting TCs in AUS currency in the next couple of weeks would be recommended....or whether to wait till March and get whatever the local ATM gives us? Thanks! :)

Nobody knows, but I bought a bunch of domestic Australia plane tickets in September for future travel and I wish I'd waited six weeks... I would have come out hundreds ahead.

I don't think things can get THAT much more advantageous for the US dollar against the Oz dollar, but one principle that might be helpful is dollar-cost averaging... the same principle that guides long-term stock investors. If you like today's rate, then buy a few hundred AU$ now, a few more in December, a few more in January, etc. You won't be betting the farm on a single transaction, but you'll take advantage of what looks like a good deal today.

You will pay dearly ,American Express after fees will give you a rate of about $1.36 on $1000 Au (official rate is about $1.49) so your losing about 13% by going to T/C at this time. One thing I forgot to include was your ATM fee's for each withdrawal it may require 3 or more withdrawal to reach that $1000 ,of course that can be avoided by using cash

one principle that might be helpful is dollar-cost averaging...Good suggestion -- I am familiar with that concept ^
You will pay dearly ,American Express after fees will give you a rate of about $1.36 on $1000 Au (official rate is about $1.49) Really :confused: How do you get the actual exchange rate they are giving you??? The TCs are free.

I wouldn't worry. The AUD is back around its long term average. I personally don't see it moving very much from where it is for the next 3-6 months. Personally I would stick with ATM's.

If you buy now and hold on to AUS dollars, you will miss any (admittedly piddly) interest from where your US dollars were. Hope you have that in the equation.

Romelle

(admittedly piddly)... In all likelihood dwarfed by a few cents' move by the AU$ against the US$, though... if it happens. 3% interest on US$2,000 for four months is only $20.

We are going in April and watching this valuation over the last year or so I have seen it fall from about parity last spring to a few weeks ago when it was at .66, so I called Wells Fargo and bought from travelers checks and cash for about .68, much better than Am EX and I could buy it on my United Visa so I earned some air miles.

However, this weekend I was watching an MSNBC weekly show about the economy in AU. The host (cute blond) was interviewing some banker and the conversation went like this; she, "it looks like it's going to .40, isn't it?" he, "I don't see it going that low, but I can see in the .50's".

Just like the stock-market, you place your bet and you take your chances.

RussBarnes -- Thanks. VERY useful info. A) about the prediction and B) did NOT know you cold get TCs at a bank using a CC ^ Will have to look into that. Probably a dumb question, but I wouldn't think banks could sell you TCs in AUS currency :confused: I only thought about it because it came up in the AMEX thread & some people said they could only choose foreign currency....so I then tho't about our trip in March.

Would buying TCs with CCs count as cash advances, and therefore, you'll be charged interest from the day of the transaction?

As to the exchange rate, with today's market, it's subject to big jumps and falls. I've even heard rumours of the rate dropping to the .30's, but personally, I can't see it happening. In my non-professional opinion, I think the current level is about where it 'should' be.

The Reserve Bank of Aus (the central bank) has reduced rates by 75 points yesterday. The rate dropped immediately after that announcement, although from what I see this morning, it's already recovered that loss. It's almost at .70 this morning.

To me, there may be a few more cents here and there, but you'll have to watch the rates pretty closely. The gains you can make may not equate to the amount of time you'll need to spend...

The other aspect is, if you lock up AUD now, can you earn interest on it? i know interest rates are very low in the US, but perhaps you can make more gains through other venues in the meantime even if the rates change a bit from now?

as the last caller asked"Would buying TCs with CCs count as cash advances, and therefore, you'll be charged interest from the day of the transaction?" and to add to that, you also get hit with interest on everything else on your credit card, unless you are to stupid or too poor to pay it off monthly.

I have traded a huge amount in foreign exchange. i bought all my raw materials overseas. i bought against the invoice presented. i could never predict the direction of the market. i read a lot about the people playing the financial market. most did it on very short term(1-2 days).

you are also playing with so little money, that unless it does move from 66 to 50, which is a huge move, it makes very little difference in the cost of trip.

Would buying TCs with CCs count as cash advances?NO. There are two MAJOR threads on FT about this topic and it counts as a purchase and you earn miles -- if it's on a mileage CC.
The other aspect is, if you lock up AUD now, can you earn interest on it?No, but I am thinking of 1K in TCs. So the low interest I would earn would probably not be a factor.....considering how favorable the current exchange rate is. Or maybe both are not a big deal and I should just flip a coin :D
you also get hit with interest on everything else on your credit card, unless you are to stupid or too poor to pay it off monthlyUm, thanks, but I have the 1K for the TCs, so I am not 'stupid' enough to leave it on a CC till March.

We are going in April and watching this valuation over the last year or so I have seen it fall from about parity last spring to a few weeks ago when it was at .66, so I called Wells Fargo and bought from travelers checks and cash for about .68, much better than Am EX and I could buy it on my United Visa so I earned some air miles.

However, this weekend I was watching an MSNBC weekly show about the economy in AU. The host (cute blond) was interviewing some banker and the conversation went like this; she, "it looks like it's going to .40, isn't it?" he, "I don't see it going that low, but I can see in the .50's".

Just like the stock-market, you place your bet and you take your chances.

The AU$ has never reached 40 cents. There are too many so called experts out there that I would not trust to feed my cat. I would buy AU currency now,

The RBA has shown that it will support the AU$ at the 60 cent mark so at current rates you will be on a winner and it can only get worse for US visitors.

I think you'll see the dollar stay .66-.67 for a few months. Anyway, I don't
have much to add to the conversation, but a heads up on somethign I've noticed the past few months here in Australia.

I'm a yank living in OZ and use my US credit card frequently. More and more outlets are asking if you want the price in USD (as charged on the credit card) The rates are always higher then just going with Australian dollars at the regular exchange rate. Here is an example, a local hotel charges 99 AUD for a room. If you want the charge in USD they charge 92$ USD for the same room. If you go with the regular AUD rate, you'll be about 10-15 bucks better off USD. I just bought a sony digital SLR camera. the charge was 648 in USD, but would have been charge about 680 AUD for the same camera if I went with the "local" rate. It was my mistake, I misunderstood the guy at the register so lost about 50 USD from my bank account. Just be aware of this charging scheme.

I guess my question is basically similar to the one in this recent thread (http://www.flyertalk.com/forum/showthread.php?t=875096&highlight=exchange) about NZ...

Generally, we never buy currency for trips... I guess I started thinking about it because a) I just saw the US-AUS exchange rate is at a relative high right now; b) there is a thread in MilesBuzz about buying Travelers Checks online in foreign currency :D

Altho none of us have crystal balls.... Any opinions as to whether getting TCs in AUS currency in the next couple of weeks would be recommended....or whether to wait till March and get whatever the local ATM gives us? Thanks! :)

This is an old question, but Californian Ladies might be have a little patience than most.

We only ever travel with cash, and when our currency is strong against the Singapore$, Thai Baht, the Euro or Indonesian Rupiah, we buy and horde little bits for a rainy day. If I were an American travelling to Australia next year, I would buy some Aussie dollars now. It's the old adage about only packing in your suitcase what you are prepared to lose, so only buy as many as you feel comfortable carrying, say AU$1000. When on a four country tour,our wallets and purses often resemble a currency exchange bureaux, yet we are used to it. We always carry the largest denomination which in your instance ask for AU$100, ten or twenty of these fit nicely into the center of your handbag and that never leaves your arm anyway. It's a different way of travelling, but you have to ask yourself, when was the last time I lost a traveller's cheque. The main difference in your travelling is that you MUST choose a better class of hotel, things are rarely stolen from a safe in the Hyatt's and the Sheraton's of this world, there's no need to lug your passport around with you and the difference in exchange pays for some bling bling here and there. regards bkkrop

If I were an American travelling to Australia next year, I would buy some Aussie dollars now. It's the old adage about only packing in your suitcase what you are prepared to lose, so only buy as many as you feel comfortable carrying, say AU$1000.

Seems like a lot of hassle for not much reward and of course there is downside risk that the AUD falls further..... on AU1000 a 1c movement in the FX rate equates to US$10....It's not very likely the AUD will rally. I stick by my original opinion wait it out the AUD is going to trade in a pretty tight range around where it is atm.

I'm seeing pretty incredible advance-purchase deals for Australian hotels online right now... AUD$180, which works out to about USD$112 at the moment, for a 4* in Sydney. Wow. We won't be traveling for a few months, but I'm sorely tempted to prepay hotel accommodation in AUD just to lock in that transaction rate.

The AUD-USD rate has fluctuated between 1.04 (May 2008) and 1.63 (Oct 28, 2008) and is presently 1.54 -- with less than 1 cent fluctuation for the past week. In between movements of up to 10% per month were commonplace, even without world economic crises or turmoil. So there is a significant fx risk that is specific to the Australian dollar; and this is the consideration for locking in the rate. A hard game to play -- consider how the NZD has diverged from the AUD in the past few months, when they are historically tightly coupled. It does seem to be more likely that the USD strength will erode in the coming months relative to the AUD, but that is a guess at best. But the transaction cost is huge for most retail trades.

Actually there are several means to prepay for the rooms at todays rate in today's USD, which at the moment is $.6189. Continental airlines, will do that and give you bonus air-miles. Qantas Holidays will book, but not as much value for many of the US travelers because their rates aren't prepaid. There are other sites too as I have prepaid for all of our April hotel rooms. Now there is always the question of where the exchange will be by then, but hey, I like Vegas and the odds here are at least even, not stacked in favor of the house.

And from my experience using Wells Fargo and my air-miles CC to buy AU money it wasn't a great fee, plus I earned more air-miles.

A good friend who is a TA has several AU and NZ customers that are really moaning for cruises they have booked and didn't pay for when the two currencies were at parity.

I haven't determined the best way to prepay currency and EARN MILES, but I did ask at my local bank last week about buying currency. They said they will do it and it is FEE FREE. I guess it's a matter of checking the exchange rate, going in, and inquiring. That way I could see how close to the best exchange they offer me.

As I got in on one of the airfare promos a few weeks back, I am sure I am GOING to AUS, so the currency would be used. But a) I haven't had time to plan out the itinerary yet so I can't lock in hotel dates; and b) there is a TINY chance the new airline (V AUSTRALIA) could push their dates back and that would directly affect me and change my March travel dates (ie. I wouldn't necessarily want non-refundable hotels at this point).

Good to see the other ideas available tho :)

. But a) I haven't had time to plan out the itinerary yet so I can't lock in hotel dates; and b) there is a TINY chance the new airline (V AUSTRALIA) could push their dates back and that would directly affect me and change my March travel dates (ie. I wouldn't necessarily want non-refundable hotels at this point).Good to see the other ideas available tho :)

Keep an eye on V Australia by watching the delivery dates of aircraft from Boeing where there is a strike at the moment

...there is a TINY chance the new airline (V AUSTRALIA) could push their dates back... OT, but I was at the airfield abutting the Boeing factory in Everett, WA last weekend and saw V Australia's first aircraft sitting there in full livery. So it's at least been assembled, and chances are good they'll be able to launch some sort of service by late winter / early spring. Sorry Boeing's production problems ruined their inaugural Christmas schedule.

The AUD-USD rate has fluctuated between 1.04 (May 2008) and 1.63 (Oct 28, 2008) and is presently 1.54 -- with less than 1 cent fluctuation for the past week. In between movements of up to 10% per month were commonplace, even without world economic crises or turmoil. So there is a significant fx risk that is specific to the Australian dollar; and this is the consideration for locking in the rate. A hard game to play -- consider how the NZD has diverged from the AUD in the past few months, when they are historically tightly coupled. It does seem to be more likely that the USD strength will erode in the coming months relative to the AUD, but that is a guess at best. But the transaction cost is huge for most retail trades.

A significant risk may be a bit of a stretch. As I pointed out a 1c movement equates to US$10. Therefore a 10% movement in the FX rate equates to US$60-70 on AU$1000. Once you take in transaction costs you are effectivley speculating rather than hedging.

The AU$ has never reached 40 cents. There are too many so called experts out there that I would not trust to feed my cat. I would buy AU currency now,

The RBA has shown that it will support the AU$ at the 60 cent mark so at current rates you will be on a winner and it can only get worse for US visitors.

BUMP:

16% gain not too shabby in this economy.

Now at the risk of cursing the $AU I still think we will hold and improve slightly.

The obvious path for $US is down because of their increasing debt.

BUMP:

16% gain not too shabby in this economy.

Now at the risk of cursing the $AU I still think we will hold and improve slightly.

The obvious path for $US is down because of their increasing debt.Which definitely appears to be the case now; looks like it would have been cheaper to visit down under when air fare was considerably more-expensive but exchange rates more favorable. $.86/US Dollar now? Ouch! :eek:

I booked our Aussie airfare, hotels, tours, etc. in Feb/Mar 09 when 1AUD = US$0.65 I'm no forex genius, I just wanted to not worry about fluctuations. So I prepaid everything in AUD. By the time we traveled the rate was 0.79 in July and now it's 0.86 Glad we paid and went when we did; at least the US is getting cheap for visiting Aussies.

We didn't exchange any currency until we arrived; cash was totally unnecessary from airport to hotel. Then we got cash from an ATM and the total fees were 1% and the official exchange rate applied.