Exchange rates might be something you’ve traditionally not paid much attention to in the past.
Sure you may have found yourself faced with the prospect of having to calculate the ‘value’ of the 20 Euro leather belt you’ve just purchased in the local Spanish market but it’s never been that big a deal.. right?
Well, when migrating to Australia the exchange rate you get for your home currency when transferring your hard earned money into Australia can be a very big deal indeed. With this in mind we’ve launched a new “exchange rate” category here at Getting Down Under to help us focus on this often overlooked area.
Lets take a quick look at the attached graph for example (Click on the image for a larger version).
The big blank line reflects the number of Australian Dollars you’d get for each UK pound spent (I’ll focus on the pound for now as most of our visitors are British and being a Pom I can relate to this currency the best). As you’ll see, it’s not a pretty picture.
To put the changes into perspective:
Let’s say you sold your house in October 2008 for £100,000. You transfer your money to Australia on the date of the sale. Back in October 2008, one UK pound was worth $2.66 Aussie Dollars so your £100,000 would get you $266,000 in Aussie Cash
Now let’s say you sold your house in the UK for £100,000 6 months ago. You transfer your money to Australia on the date of the sale. Six months ago you’d get approx $2.02 AUD to the UK Pound so your £100,000 would get you $202,700 in Aussie Cash
Fast Forward six months to yesterday when the Aussie Dollar was worth only $1.79 to the pound. Sell your house now for £100,000 and you’ll get only $179,000 a difference of $23,700 from only 6 months ago or a massive $87,000 less than you would have got in October 2008. That’s a lot of barbies!!
The global financial crisis has played a big factor in this however there are many other things going on in the world which will also impact the value of the money your bringing with you down under. We’ve been providing commentary on these changes within our Money Matters forum for some time however keep your eyes open for more articles on this subject during the weeks and months to come.
Unfortunately we can’t control the exchange rates however we hope that you’ll find this and future articles posted within our new ‘Exchange Rates’ category of interest.