More Bang For Your Buck: Destinations Where The Aussie Dollar Is Strong

Head of Wholesale for Travelex Australia and New Zealand, Adam Nezval, says that since the end of the Covid-19 pandemic, “the Australian dollar has somewhat normalised in its strength regarding other major currencies”.

“The Covid period was quite unusual, we saw a swing of up to 30% in the Australian dollar against the US dollar between 2020 and 2021,” he says.

“It went from as low as 57 cents to at the commencement of COVID when there was a flight to safe currencies, then when travel patterns began to return to normal it went up to 80 cents. Those sorts of spreads are phenomenal. The Australian dollar has now found its way almost exactly between those ranges at 67 cents at the moment,” he says.

Against the Euro, the Australian dollar is currently buying 61 cents, which is slightly below the five-year average of 63 Euro cents, and Mr Nezval notes a similar pattern during the COVID pandemic. “At the start of COVID it was basically 51 cents to a Euro and similarly, we saw a large resurgence towards the end of 2022 where the Australian dollar went up to 70 cents.”

He says financial markets, monetary policy and elections are among the factors that influence foreign currency exchange rates.

Managing Director of Travelex Australia and New Zealand,Darren Brown, adds that when borders first re-opened travel demand was driven by people wanting to visit family and friends and while that continues to play a role, Australians are once again looking towards experience-based travel.

“As long as the Aussie dollar is consistent and sitting right in that sweet spot of its historic trends, that allows Australians to have those experiences now,” he says.

Japan

Brown rates Japan as a top-value destination for Australians right now, due to the current strength of our dollar against the Japanese Yen. “If you look at where the Yen is pegged currently, relative to historic trends, you’re getting over 90 Yen to a dollar, whereas historically it was 70 to 80 Yen to a dollar,” he explains.

This is due to the Japanese central bank leaving its interest rates on hold at very low levels, contrasting with rising interest rates in Australia. As a result, investors have moved money out of Japan in favour of countries offering higher returns, such as Australia.

Adding to Japan’s popularity is its rising reputation as a ski destination for thrill-seeking Aussies and its exotic cultural experiences.

South Korea

It may be relatively unexplored by Australian travellers but a weak South Korean Won means South Korea could be a new part of Asia for value-seeking Australians to explore. Similar to Japan, it offers an ancient culture juxtaposed with cutting-edge modernity, plus mountains, islands and a vibrant food culture.

With $1 Australian dollar currently buying 881 Won compared to the five-year average of 844, Nezval says the Won is Asia’s worst performing currency this year, largely due to the size of South Korea’s trade deficit.

South Africa

If a safari is on your bucket list, now might be the time to take the plunge. With $1 Australian dollar currently buying 12.9 South African Rand, it offers good value at 18% above the five-year average. Beyond the wildlife, there’s culture, history and Cape Town’s beautiful beaches to explore.

The Rand’s woes are not restricted to its exchange rate against the Australian dollar, with its devaluation against many major currencies due to South Africa continuing to spend more on imports than they receive on exports,Nezval says. “Their foreign capital debt is rising along with their current account deficit widening.”

Indonesia

In good news for Bali enthusiasts, $1 Australian dollar is presently buying 9,934 Indonesian Rupiah, which is below the five-year average of 10,279. But due to a lower cost of living, Australians continue to get bang for their buck in Indonesia.

“Indonesia is a place where Australians love to travel and $100 gets you almost one million Rupiah. It’s not a million Aussie dollars, but in Indonesia that amount will last you days,” Nezval says.

New Zealand

The Australian dollar is currently buying NZ$1.06, near its five-year average of $1.07. “The New Zealand dollar came very close to parity in 2015 and again in 2020, but currently, there’s still that little kicker,” says Mr Nezval.

While our exchange rate with our Kiwi cousins may not be at its record peaks, New Zealand still offers good value for Australian travellers due to the cost of flights, which should be a key consideration for Australian travellers due to our geographic isolation from the rest of the world. “An airline ticket to New Zealand from Australia is a lot less than an airline ticket to Japan,” Nezval says.