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Aussie travellers seek to hedge their funds as dollar falls

October 29, 2014 Destination Global, Headline News No Comments Email Email

egtmedia59Australians are buying up foreign currency in the run-up to the Christmas and New Year holiday season as the Australian dollar continues a steady slide, according to foreign exchange houses.

The AUD has fallen 20% against major currencies since reaching record heights a couple of years ago and it may well fall further.

The OzForex Group, a global provider of online international payment services for consumer and business clients, reports a surge in travel money card applications.

The Australian dollar has fallen 8% against the US dollar over the past 12 months, a drop of 20% since its record exchange level, reached in July 2011. Some economists tip a further 20% fall to below US 75 cents.

The Aussie unit has also fallen substantially against the Euro and the British pound.

Facing the prospect of being poorer tourists the next time they travel, Australians are buying currency well in advance, OzForex’s head of product, Margaret de Polignac, confirms.

“We would usually see a drop off in travel card activity in July-September, as it’s between the key June and January travel seasons. But this year we’ve experienced a significant rise, both in applications for new travel cards as well as people loading money onto their travel card,” de Polignac says.

“We’ve also seen a huge spike in people buying Japanese Yen, three times higher than usual, possibly because October is considered an ideal month for travel due to Japan’s lovely autumn weather.”

Research by OzForex previously found that retirees (11%) and students (5%) are the two top users of OzForex’s Travel Card, followed by directors, accountants and engineers. 43% of cardholders are over 50, a sign that baby boomers could be increasingly comfortable with online banking products rather than going into retail bank branches.

A seasonal pattern typically affects currency purchase as well, with Euros being loaded on ahead of the Northern hemisphere summer holiday season in June, whereas demand for US dollars peaks in the run up to Christmas.

Prepaid travel money cards are rising rapidly in popularity. MasterCard has predicted Australia’s prepaid consumer travel card market will reach AUD 2.9 billion by 2017. According to a Research and Markets report, Asia Pacific is the fastest growing regional market for prepaid travel cards.

OzForex is currently offering all Travel Card users the chance to “Double Your Dollars in November!” – for any amount loaded (up to AUD 5000) they can win the same amount back.

Edited by : Peter Needham

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