While on your family vacation in the US, you treat the family to dinner at a fabulous restaurant. You pay the US$100, and the next day you see AU$138 has been deducted from your account. Easy.
The next day, you decide you loved the meal so much you want to go back again. As you and your family order the exact same meal, you see that you’ve paid AU$145 for the same food, from the same restaurant, with a receipt for US$100. What happened?
Over the past 20 years, one Aussie dollar has been worth as much as US$1.10, and as little as 48 US cents. Currency movements like this are complicated and have myriad factors. Whether it be trade relations with the US and China, a slow-down in overseas commodity demand, or an uptake in demand for Aussie-grown produce, many things can influence how much you’ll pay for your next meal.
Here at Money Morning, we have the expertise and know-how to make sure any investor with exposure to foreign currencies is prepared for the events that affect the Aussie dollar, and where to keep an eye out.