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Dollar dives beyond 5yr low 3:40
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Soft commodities markets and likely Eurozone money printing are weighing on the Aussie dollar.
- The Australian
- 05 Jan 2015
- Business
Expensive trip ... pre-booked trips to the US could cost more than you first intended. Source: Supplied
THE increasingly fragile Australian dollar has travel agents urging holiday-makers to lock in rates now for United States trips or consider going elsewhere.
Overseas bookings are generally subject to currency fluctuations that can leave unsuspecting travellers out of pocket by thousands, if the dollars drops significantly between the time of booking and the actual holiday.
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Warning ... the terms and conditions of travel bookings allow for agents to ask for more money from clients when currency fluctuations occur. Picture: Supplied. Source: Supplied
Australian Federation of Travel Agents CEO Jayson Westbury said the issue had not arisen in recent years because fluctuations had been no more than a few cents here and there.
But a ten-cent drop like we have seen in the last six-months would have an impact, Mr Westbury said.
“We’ve been in such heady ground for so long but now we’ve moved, and who knows — it doesn’t look like (the dollar) is going anywhere north for a while,” said Mr Westbury.
“If anything it could keep going south a bit more.”
He said anyone who had booked a US holiday should check with their travel agent what their obligations were, should the dollar lose more ground against the greenback.
“Historically all the agencies used to be pretty strict about getting payments but people are less diligent about it now because there hasn’t been the same fluctuation in price,” Mr Westbury said.
“You don’t see it happening with airfares because they’re usually priced outbound from Australia.”
Taking a dive ... the Australian dollar is now worth about 78 cents against the US greenback. Picture: Supplied. Source: Supplied
The dollar took another hit yesterday sinking to 78 US cents, but Commsec senior economist Savanth Sebastian said it was likely to go lower.
“We’re expecting it to get down to 73 cents by midyear,” said Mr Sebastian.
“If the Reserve Bank doesn’t cut rates, there may be a short term bounce, given the sharp decline it’s had in the last week.”
The good news for travellers is while the currency is not worth nearly as much as it was a couple of years ago in the US, it is holding its value in other countries, including Canada and Japan.
Price hike ... the falling Aussie dollar could add a motza to the cost of an Aspen skiing holiday. Picture: Supplied Source: Supplied
“Northern hemisphere skiers should be thinking Japan, or Canada if you want a North American experience,” said Mr Westbury.
The dollar is also remaining fairly solid against the British Sterling pound and the euro, resulting in strong travel to the traditional holiday favourites of the UK and Europe.
Caroline Kennedy from Cox & Kings travel company said the over 40s traveller in particular was not concerned by the rise and fall of the Aussie dollar.
“They want to see the world and they’re prepared to pay for it,” said Ms Kennedy.
“Overall, over 40s travellers will take holidays in Europe, even if it means staying a few less nights, rather than not go at all.”
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