Australian / US dollar
 

I am beginning to become very concerned about the Australian dollar, it has dropped 10c from the U.S. dollar in the previous few months!! If it drops much more I think I will have to cancel my trip.... this is very worrying :thumbdown:

You can expect currency changes while you are on your trip! Plan on them.

Some ways of preventing these changes is to buy the forigen currency at todays rate... of course you will earn on intrest .. but you can have it in travellers cheques (limited theft worries). Or you can have it in a bank cheque made out in the forigen currency. I've done both .. it works well when your currency drops 20% due to some war somewheres - but you will have to cop the 10% gains too that come along now and then. The OZ doolar has ranged from 50cents us to 95?c us .. some of that is the us dollar moving, some of it is the OZ dollar moving.

The rate will change all the time when you get there - and more importantly, the excahnge rate you get in your hand can be very very varied, regardless of where it is in the wholesale market

i would bet on it staying above 85c for now, i think it will be back up higher next week - but always better to plan for worst case, going down, because itsbeen a t record highs for a while

I have done a lot of travelling in my life (not by bike) and I always seem to be having to by my ticket or do something when the dollar is way down, then after, it goes back up. This used bug me a little, but now I don't think about it, I just do what I am going to do and don't let currency rates govern my decisions. And looking back, I can't see that it would have made any difference. Just keep your eyes on where you are going and you will get there.

He who hesitates is lost.

Cheers, enjoy your trip.

Thanks for your comments guys, I think I'm going to start south (chile) and head north because the difference in value isn't so bad that way and if it's really bad at the US border then I will catch a ferry over to Cuba from Mexico instead (if possible, not yet researched).

Was a bit worried there..

Just an update, this is really bad, it's dropped 30c since July from 98c to 68c. I've come up with some cost cutting ideas (such as riding a 125) but damn it's painful to see my moneys floating away :(

Pocket, I am sure your loss is far less than what has happened to my super fund. You just have to not think about it, it's something beyond your control - only fret over the things that are within your control.

Garry from Oz.

P.S. If you want to chat I'm now back in Melbourne and happy to share my South American riding experiences over a beer if you like.

It it's at all possible, I would avoid buying US dollars. If that's not possible, it may be better to defer the trip until the currency markets recover from their current lunacy.

Can someone please explain to me in simple terms why the US dollar is suddenly so much stronger when it's the US economy, and in particular the US banking system, which is at the heart of this global financial crisis?

Hi

I'm not an expert, so this may not be 100%, but I'm pretty sure the reason is as follows:

Its actually got very little to do with the strength of the US dollar, rather the weakness of the Australian dollar.

Until very recently most thought Australia would be insulated from the worst of the global downturn. A key reason people thought this was that Australia is heavily reliant on resources, in which demand was still very strong.

The majority of this demand is from China. It has now become apparent that China is starting to feel some effects and their economy is softening. This has led to reduced demand for resources, leading to them falling in value.

Due to this, people are less confident about the Australian economy, therefore the AUD has fallen against nearly all major currencies.

This I'm pretty sure is the key reason, although there will be many other factors that have exaggerated this fall.

Hope this helps!

J

Can someone please explain to me in simple terms why the US dollar is suddenly so much stronger when it's the US economy, and in particular the US banking system, which is at the heart of this global financial crisis?

When a country owes a few million, they have a problem - eg Iceland, they'll be allowed to have a famine before anyone will help them out and then it will have strings attached - no free education, no free healthcare, etc.

When a country owes billions more than their gross national product for the next 20 years, we have a problem - eg USA.

For the countries that are owed money by the USA, its not in their interest to let the US$ slide to its real value based on GDP and the value of their exports. So you have the oil rich States and China who are owed billions in US$ who wont want to see their loans devalued by currency traders and are now buying up the flood of excess dollars from the bail out of the US banks and their bad loans. Its interesting how nearly all empires have ended in this way going back to the Greeks and Romans.

I still don't pretend to understand this. But are you saying the US is now on the way out?

I think there are some cultural indicators to suggest it's a nation in decline.