Get the exchange rate forecasts before sending money overseas to see if you can save.
Exchange rates are changing all the time, so accurate forecasts can help you save money on international transfers, especially for larger transfers.
You can lock in today's rates if you think AUD is going to drop compared to the USD, or take advantage of better rates later if you think it's going to rise.
AUD/USD forecast
NAB predicts that the AUD/USD price will be trending broadly upwards from throughout 2019 and 2020, to around 0.75 by the end of 2019, and 0.79 at the end of 2020.
Westpac is less optimistic, forecasting a small decline through 2019, to 0.68 in December 2019, and 0.70 by December 2020.
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How to take advantage of exchange rate forecasts
If the AUD is going to drop against the USD you might try saving money by either:
- Sending money now rather than waiting for better rates
- Using a forward contract to lock in the current exchange rate for a future transfer
But if AUD is going to rise against the USD you might try saving money by either:
- Sending money later rather than now, in the expectation of better rates at a later date
- Using a limit order to set up a transfer in the future that will automatically execute at the specified rate
How to get better rates
Looking at forecasts can be a useful way of saving money on international transfers, especially if you're sending a lot of money to the United States.
But it's just as important to make sure you're choosing a transfer service that offers competitive rates every day. Enter the details of your transfer into the calculator below to see how widely the rates can vary between providers and how much you can save.
The "Rate" and "Amount Received" displayed are indicative rates that have been supplied by each brand or gathered by Finder.
Exchange rates are volatile and change often. As a result, the exchange rate listed on Finder may vary to the actual exchange rate quoted for the brand. Please confirm the actual exchange rate and mention "Finder" before you commit to a brand.
Factors affecting the AUD/USD forecast
There are a lot of factors affecting currency forecasts and even experienced forex traders will often be in disagreement. One of the starting points is looking at purchasing power for a sense of how much a currency is really worth, and therefore whether it’s over or undervalued.
For example, if a basket of common household goods costs $100 in Australia, and an equivalent basket costs US$50 in the United States, then AUD$1 should theoretically be worth USD$2. If it's not, you can look at whether it's overvalued or undervalued as a starting point for your own currency forecast.
These interest rate changes affect inflation, consumer behaviour and international investment in a country, and other factors which all come together to change currency prices.
By itself:
- Raising interest rates generally mean a rising currency value, as it attracts more foreign investment and demand for a country's currency.
- Lowering interest rates generally means a lowering currency value, as does the opposite, and reduces foreign investment.
- International trade. More exports than imports means more demand for a country's currency.
- National debt and growth. Lower national debt and more growth bolsters confidence in a country's economic future and attracts more foreign investment.
- Policy changes. Policy changes of many kinds can affect a currency's value.
- Other markets. The value of a currency can be affected by other markets. For example, a booming stock market may take money from forex investments.
- Speculation. Speculative currency trading can also impact the value of currencies.
There are a lot of factors which determine the value of a currency, and in the short run it tends to be a lot of cyclical ups and downs. But no matter which way it's going, it's always worth getting the best rates possible.
