With the US becoming a favourite holiday destination with families, on the back of discounted airfares and some great package deals on accomodation it can be tempting to head across the Pacific Ocean. But currency valuations are going to make that cheap flight deal seem like the opening of a sinkhole. With the Aussie dollar tipped to drop below US$0.70, shopping in the land of the free is not going to be nearly as much fun.
When I went to the US back in 2007, around the time of the GFC, our dollar was work close to $1.10 in the US. And with a lot of goods already cheaper there than here, it was a shoppers paradise. I remember visiting the Nike outlet store in Vegas and walking out with several pairs of shoes for me and the kids, as well as some clothes, for about US$120.
Sure, the goods were discounted but our dollar had a lot of buying power. We haven't hit those levels since but things are going to get a lot worse. The exchanges rate is currently around the $0.79 mark but we can expect it to get closer to $0.70 if the experts are right.
Reports suggest the gap in local interest rates and those in the US are set to reach the broadest difference ever. And that, along with other economic triggers, will impact exchange rates.
If you're planning to do some international online shopping, it might be a good idea to get that done now before things get a lot more expensive. If you've booked tickets for a trip, you might find pre-paying for things now, before things go south is worthwhile. And perhaps hit the bank and grab some US currency now, either on a pre-paid credit card or in folding cash, so that you're protected to some degree from the potential falls.