AUD to...what, exactly?

October 10, 2008 8:12 AM

I´ll be doing some traveling soon, and since I´m in Australia, it seems expedient that I change my currency as soon as possible. What´s the best bet, Euros or USD? I´ll be leaving in about two months, and visting both Europe and the US.
posted by nicolas léonard sadi carnot to travel & transportation (9 comments total)

1. Don't change your money in advance. If you could accurately predict currency exchange rates, you would not be asking this question.
   
2. Find the Australian bank that gives the best rate on cash withdrawals and credit card purchases. Open an account there.
   
3. Use your credit card and ATM card while abroad.

posted by grouse at 8:25 AM on October 10, 2008 [1 favorite has favorites]

Using ATMs to withdraw local currency as you travel is the best way - the exchange rate may get better in two months, foreign exchange places rip you off with both the exchange rate and the fees they charge, and it's not a great idea to travel with lots of cash. If you have an account with Westpac, you can withdraw money internationally without ATM fees which saves quite a bit.
posted by cmonkey at 8:48 AM on October 10, 2008

grouse and cmonkey are right. You don't want to travel with lots of cash, and if you're travelling in the US and Europe, you'll need both Euros and USD. Use your debit card at local ATMs while you travel - as long as your bank card is Cirrus/Maestro compliant, you won't have any trouble.

Withdraw money in big chunks to save on ATM fees, and carry most of it in a travel pouch under your clothes, around your waist or your neck, with your passport and cards. Transfer to your wallet as necessary.
posted by Dasein at 8:55 AM on October 10, 2008

By way of background for people who don't understand the poster's urgency - the New Zealand dollar, Australian dollar, and Brazilian real have been on the long side of the currency carry trade for several years. With the unwinding/delevering in this trade, the AUD has lost around 20% of its value over the past few weeks (see here - if the poster were heading to Japan, things would look slightly worse, as it was the short side of the trade)
posted by milkrate at 9:10 AM on October 10, 2008

A few thoughts.

ATMs are the best ... until you can't find one. Always have some kind of a back-up plan.

Traveling from Canada into the USA, I've always found the exchange rate more reasonable once in the USA. Don't assume it's wiser to work everything out before leaving home.

If you must use a Foreign Exchange place, don't do it after the local banks close.
posted by philip-random at 9:32 AM on October 10, 2008

By way of background for people who don't understand the poster's urgency - the New Zealand dollar, Australian dollar, and Brazilian real have been on the long side of the currency carry trade for several years.

So what? Past performance is no guarantee of future results. Currency risk works both ways. By getting cash now you do not reduce your currency risk, but you are guaranteed to increase your transaction costs and mugging risk. Doubly so if you do something like buying only EUR that you will then pay again to convert to USD.

Living as an ex-pat American in Europe for almost five years, I saw the conventional wisdom proven wrong over and over again. "Everybody knew" that the USD would stop decreasing in value, but then it kept decreasing in value. Then "everybody knew" that it would keep decreasing in value, and then it started appreciating in value. People should stop assuming they know where the foreign exchange markets are going.
posted by grouse at 10:41 AM on October 10, 2008

I wouldn't change it now - the AUD is currently at the lowest it's been in ages and it's way, way more than likely it will improve before you leave. Your best bet to save on currency exchange while travelling is, as others have said, to find a bank account with no foreign transaction fees and a decent exchange rate, and use ATMs and your credit card.

The AUD was 33p when we moved to the UK in 2004 - that was very painful, but the rate quickly improved. If it's ~37p now it's likely to be back up again, even if it dips further in the meantime, by the time you travel.
posted by goo at 12:31 PM on October 10, 2008

it's way, way more than likely it will improve before you leave.

How do you know this? If this is true, then why aren't smart investors investing money in AUD-denominated securities (which would, in fact, cause the value to increase today)?
posted by grouse at 1:19 PM on October 10, 2008

Aye, grouse, I don't, because I wasn't speaking from a currency speculator's perspective, but as an expat and traveller who spends money in Australia quite frequently - if you're travelling in two months' time there are better ways to prepare for spending in foreign currencies than fretting about the exchange rate now, when it's very recently dived.
posted by goo at 2:47 PM on October 10, 2008