Why Aussie travellers should lock in their exchange rates before travelling to the US

Sally McMullen 9 February 2016

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Planning a trip to the US? Here’s why you should lock in the exchange rate on your travel money card now

If you’re thinking of taking a trip to the land of stars and stripes in the near future, you might want to lock in your exchange rate as soon as possible. The Australian dollar has taken a fall, meaning that you’ll get less bang for your buck when exchanging your Australian funds to US currency on your prepaid travel card. Discover why the dollar has dropped and what you can to do protect yourself.

What does this mean for me?

A poll of analysts by Reuters predicts that the Australian dollar is due to fall, seeing the currency at US69c in 12 months time. So if you’re planning on using a prepaid travel money card on your trip to America, there isn’t a better time than the present to lock in your US currency.

Say if you were to load $3,000 and lock it into US dollars on your travel card when the market was sitting at the 70c mark, you’d end up with $2,100 US dollars. If the Aussie dollar continues falling and ends up at 67c around the time of your holiday though, you would end up with $2,010 US dollars once you completed the transfer. This means you’re down $90 compared to if you exchanged your currency now. However, keep in mind that exchange rates are slightly unpredictable, so there's always the chance that it moves and, if you hadn't locked in your funds yet, you could gain the $90 or more.

Why has the Aussie Dollar dropped?

While the Australian dollar has been on a one-month high, jumping as high as US72.43c on 4 February, it is predicted to fall in the coming weeks. By 5 February the value had already reduced to US71.73c.

The fall has been attributed to a disappointing Christmas period in the US with retail data was well below the consensus. After hiking rates in December by 25 basis points, the US Federal Reserve System (Fed) has predicted that it will continue tightening monetary policy this year. Unlike the four hikes that the central bank forecast in December, the Fed predicts it won’t lift its rates until March and that they may only rise once in 2016. The end result? Less money for Australian travellers.

While there’s not much you can do about the falling dollar, there are ways you can limit the damage it has on your travel budget. Do your research and exchange your rate if you can. If you’re still comparing travel money cards, check the provider's website to see the exchange rates in place.

Compare prepaid travel cards you can take to the US

Rates last updated December 6th, 2016
Available Currencies ATM Withdrawal Fee Reload Fee Initial Load Fee
ANZ Travel Card
ANZ Travel Card
AUD, CAD, EUR, GBP, HKD, JPY, NZD, SGD, THB, USD, AUD 3.50, CAD 3.00, EUR 2.20, GBP 2.00, HKD 20.00, JPY 260, NZD 4.50, SGD 4.00, THB 95, USD 2.50 1.1% of the value purchased $0 Go to site More
NAB Traveller Card
NAB Traveller Card
AUD, CAD, EUR, GBP, HKD, JPY, NZD, SGD, THB, USD $0 per withdrawal on international ATMs and $3.75 per withdrawal at any Australian ATMs $0 $0 Go to site More
Cash Passport MasterCard
Cash Passport MasterCard
AUD, CAD, EUR, GBP, HKD, JPY, NZD, SGD, THB, USD $2.50 for withdrawals made overseas 2.95% of the amount withdrawn for domestic withdrawals $0 $0 Go to site More
Qantas Card with Qantas Cash
Qantas Card with Qantas Cash
AUD, AED, CAD, EUR, GBP, HKD, JPY, NZD, SGD, THB, USD AUD 1.95, CAD 2.00, EUR 1.50, GBP 1.25, HKD 15.00, JPY 160, NZD 2.50, SGD 2.50, USD 1.95, THB 70.00, AED 6.50 $0 $0 Go to site More
Travelex Travel Card
Travelex Travel Card
AUD, CAD, EUR, GBP, HKD, JPY, NZD, SGD, THB, USD Travelex does not charge an ATM withdrawal fee when you use your Travelex Multi-currency Cash Passport to withdraw currencies that are loaded on the card at overseas ATMs where MasterCard is accepted. The greater of 1.1% of the initial load / reload amount or AU$15.00 $0 Go to site More
Rates last updated December 6th, 2016
Currency Conversion Fee Monthly Inactivity Fee Multiple Currencies on One Card Maximum Load Amount
ANZ Travel Card
ANZ Travel Card
3% $3 Yes $80,000 Go to site More
NAB Traveller Card
NAB Traveller Card
4% $0 Yes $45,000 Go to site More
Cash Passport MasterCard
Cash Passport MasterCard
0% $0 Yes $100,000 Go to site More
Qantas Card with Qantas Cash
Qantas Card with Qantas Cash
$0 Yes $20,000 Go to site More
Travelex Travel Card
Travelex Travel Card
5.95% AU$4.00 per month No $5,000 Go to site More

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2 Responses to Why Aussie travellers should lock in their exchange rates before travelling to the US

  1. Default Gravatar
    | February 25, 2016

    If I have US dollars now. What is the best time to convert them?
    At low value of Australian $ or high value of Australian $?

    • Staff
      Sally | February 26, 2016

      Hi Glenn,

      Thanks for your question.

      If you’re looking to transfer US dollars into Australian dollars, you’ll get more value for your US dollars while the Australian dollar is low.

      Cheers,

      Sally

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