Money: Good Time For Aussie Trippers

• March 20th, 2010
• Posted by 7thmin

OPINION: With friendly exchange rates, in strictly street-level, retail terms, private travellers from Australia might hope for very pleasant Summer days in 2010.

PLAIN FOLKS CAUGHT IN  THE CURRENCY EBB AND FLOW

Itinerant citizens, and expatriates have been able to squeeze their individual experiences and stories in among the huge movements of shifting exchange rates, over the decades.

Exchange rates affect trade, but at a strictly retail level, Australians can’t have missed the travel and shopping implications of the climbing local dollar seen on nightly news reports since mid-2009.

Main interest of course is in the reserve currencies, United States Dollar and Euro, both having their travails; and, out of respect for traditional travel habits, New Zealand and the British Pound.

(New Zealand has become cheap for a sleep-over; where it would customarily cost $1.20 for A$1, and is this week $1.29; for the USD, an Australian dollar this week buys 91.5 US cents, while visitors to America over the years have been accustomed to calculating it at 75c, but at times getting as little as 55  – dcerates.com, 20.3.10).

POOR OLD POUND – AND EURO

Travellers this week in the United Kingdom are receiving 60.9 new pence per Australian dollar; three years ago they would be converting price tags at 40p and possibly coming off slightly disappointed – a 50% gain is something to text home about.

The Pound comes off worse also against the European currency.

The European Central Bank (picture) daily nominal effective exchange rate is indicating a change against the Pound of -4.9%, over the last year, (April 2009, 0.94 GBP; March 2010, 0.89 GBP).

The Australian dollar at present buys 67.67 euro cents, whereas the shrewd calculation to make in the street, in 2007, was 60 to the dollar – a 12.5% “discount” right now for the Aussie in a cobble-stone street.

A graph from x-rates.com this week, representing Euro values to Australian dollar,  shows movement in that range, over 120 days.

SHOP TILL THE RATE DROPS

There is plenty happening in the retail area for the shopping conscious.

The current United Kingdom Retail Bulletin says sales are up towards 10% since the same time last year.

The fashion component has increased 10.9%, and on the Internet, non-store channels have reported a 46.3% boost in sales over the twelve months’ period – a sign, it seems, of acute oversea interest in that slipping GB Pound.

In France a picking-up of retail trade has been given as the cause for a jump in inflation.

A report in Le Monde (16.3.10) says Winter sales have promoted general price rises of 0.6%, for the month of February, making the annual rate now 1.3%.

Not a shopping-led heating-up of the crisis-hampered European economies, but once again, for the retail traveler, these are once again interesting times.

TRAVELLERS’ TALES OUT OF HISTORY

The amount of jingle in the pocket is part of the memory for a multitude of travellers across continents.

According to folklore the European working holiday for 1950s Australians meant wintering at Earl’s Court, where local pay in a temporary job might be derisory, but good enough to augment the trip savings – and at least the pounds brought from home could buy something.

In any event, with the Summer there’d be enough to venture “on the Continent”; get a Vespa or go hitch-hiking.

Yet, in the years of directly controlled exchange rates, Australians overseas might get the sense of being asked to subordinate their selfish small-change concerns to the greater good.

A weak rate of exchange was considered the least we could do for export-orientated farm industries, as it is today; so the Australian money, (though a pale shadow of the state of the anorexic Yuan of this Century), was kept anemic enough.

(According to folklore, also, Robert Menzies did campaign for “putting value back into the Pound”; and didn’t in the end; though somehow the will got to be taken for the deed – at a psychological level folks could think of the Pound as a solid article).

Come the 1970s, I can aver that an Australian dollar one day bought $US1.17; in France the standard and price of small hotels was well regulated; major hotel chains had not yet gobbled them up; a couple might enjoy modest comfort and a tonne of charm for A$5-6.

The battle against inflation in Australia was behind the rate in that era; there’d be a price to pay, an ever-greater price, once you left that small hotel to go home.

Likewise with another fluctuation; a quarter of a Century later, the A$ this time was well down, and we had the Barmy Army bellowing in the stands: “Two dollars to our poun’”; not very polite, but that was the rate that day, and it must have made for some wonderful shopping memories of Sydney.

Reference

European Central Bank (ECB), Frankfurt, Daily nominal effective exchange rate, 20.3.10. http://www.ecb.int/stats/exchange/…, (20.3.10).

Le Monde, “La France renoue l’inflation” (Back to inflation in France), Paris, 16.3.10. www.lemonde.fr/ …, (20.3.10).

x-rates.com, Australian dollars to 1 Euro, (120 days), graph, 20.3.10.
http://www.x-rates.com/d/AUD/EUR/graph120.html, (20.3.10).

The Retail Bulletin, “Spring is in the air for the High Street as sales rise”, Reigate, Surrey, 15.3.10. http://www.theretailbulletin.com/news/spring_is_in_the_air_for_the_high_street_as_sales_rise_15-03-10/, (20.3.10).

Pictures

European central Bank, “Eurotower”, Frankfurt, ECB; hotel,destination360.com;charity shopping, josephhouse.com; Vespa, vintagevenus.blogspot

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