The pros and cons of a strong Aussie dollar

I don’t mean to sound cynical, but it’s obvious I’m not about to go travelling internationally. Experts may tell you that the Aussie dollar moves up and down as a result of various economic and political factors, but I know this isn’t the case. The Aussie dollar goes up when I am not planning a trip, and dives as soon as I board an aeroplane. It’s a scientific fact.

Moving beyond the little ups and downs, as a general trend the Aussie dollar is doing swimmingly against the weakened US dollar and not too poorly against the EU and the pound, a result of a relatively light pounding by the GFC. It has risen 52% since October 2008.

Luckily for anyone planning to make use of this currently strong Aussie dollar, I’m safely in Australia for the next year, at least, so start planning how best to take advantage of it.

Here’s what I would do

(If I was freed from my aussie dollar curse!)

Advantages

A quick look at the advantages for us Aussies!

Get your travelling boots on

If you are long overdue for a holiday, now is the time to take it. With commentators expecting the dollar to reach parity to the US dollar in mid-2010, now is the time to see the world on the cheap.

Airfares are now more expensive because of rising costs of oil internationally, but compared to the days of travelling with a dollar worth US52 cents, dollar for dollar is a money saving deal if ever you saw one.

Appreciate the miles in the road

Commentators also suggest that, while petrol prices are rising, they would be skyrocketing without the strong Australian dollar.

It’s not saving money as such, but compared to the prices that we could be seeing, cheaper petrol is a major benefit of the strong Australian dollar.

Get virtual

Stuart Fagg suggests taking advantage of the strong dollar by shopping online on European and US websites. You’ll make significant savings on what you would have paid a year or two ago.

Now to the bad news

A strong Australian dollar is sensational for some, and not so great for others, particularly those employed by domestic tourism or exporters.

Obviously people are less willing to visit Australia if it is more expensive, and will shop elsewhere if they can obtain the goods more cheaply. This can make things pretty tough for some industries.

There is debate whether a strong dollar is always a symptom of a strong economy, or merely the differentiation between interest rates here and internationally. While a strong dollar is something that garners a lot of excitement, the wider picture of Australia’s escape of the more calamitous problems of the GFC is the positive one currently.

So how best can you take advantage of the Australian dollar? If you don’t plan on spending money or rely on exporting for your crust, then there aren’t that many advantages to gain. If, however, you’ve got a bit of money to burn and want to do things cheaply, now is your time to shine.

If I were you (and not a curse on the fortunes of the Australian dollar), I would be checking out some pretty sweet fares to Southeast Asia right now.

For the present, all I can do is dream. Until, at least, some exporters pay me to go travelling again and rescue them from the Australian dollar.

How will you take advantage of the Aussie dollar?

Does it affect your day to day?

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