For several years now, compared to other prominent countries like the United States (US), Australians have been enjoying the lap of luxury when it comes to amazing travel deals and financially rewarding vacations and holidays abroad.
That’s because Australia’s dollar (AUD) has been financially aggressive against worldly euro, and has been worth more than the un-seeded dollar in the US. In fact, many foreigners who visit or come to live in Australia are astounded by (what they would consider) how expensive it is to live in Aussie territory in comparison to their home country.
But as it’s been said many times over, “All good things must come to an end.” Reports show us that in days past, the AUD now ranks below the US dollar.
According to Steen Jakobsen, Global Chief Economist of Denmark’s Saxo Bank: “The Australian dollar, as far as I’m concerned, is the most overvalued currency relative to its outlook, even worse than the euro. It’s up 70 per cent since the Lehman Brothers crisis and it needs to come down.”
Lehman Brothers was an investment corporation which buckled in 2008, sending a rippled effect throughout the global market, pummeling stock markets which caused the AUD to drop as low as .60 US cents.
Mr. Jakobesen based his position on considering the state of the economic slowdown in countries such as China, general economic global slowing and weak domestic growth, will drive the Reserve Bank of Australia (RBA) to cut interest rates drastically.
Mr. Jakobesen also suggested that the RBA, which currently regulates the cash rate at a level of $3.75, may slash the rate to as little as $2.25, and if pooled with a lack of global confidence, would sink the AUD even lower if investors were to become discouraged from investing their dollars in Australia.
Though Mr. Jakobsen’s outlook on the Aussie dollar is a bit austere, eight out of the
thirteen currency experts which assessed the situation, anticipated that the Aussie dollar would be trading above $1.00 US by the end of 2012.
So what can the Australian traveller do to continue getting the best bang for their buck? Try visiting or vacationing in countries whose dollar is a bit weaker but sound in destination such as India or South Africa. If you’re looking for a premium snow resort, instead of Japan, try Korea’s white powdered resorts.
These options will still give you the thrill of a life time but keep your Australian dollar close to your wallet.