What does a falling Aussie dollar really mean to families like yours?:

It has been widely reported on the news that Australian dollar has dropped to a 6-year low on 22-Jul-2015.

We are not going to talk about the effect of dropping dollars which has created new advantages for businesses in agriculture, manufacturing, exporting or tourism. Also, let's ignore the reasons behind the fall of Australian dollar, which is simply due to the relatively stronger US economy, and slower growth in China that has depressed the mineral prices in Australia.

This article is about what does a falling dollar really mean to families like yours and mine in Australia?

Travel

This is straight-forward. When the dollar falls, overseas travel costs more. Period. 

You will need to fork out more to buy the same ticket, book the same hotel or even dine in the same restaurant overseas. However, this applies to certain country with stronger currency against Australian dollar, including United States, Singapore and Indonesia. However, the Australian dollar has performed relatively well against the Yen and Euro, so you might consider Japan or Europe as your next travel destination.

By the way, if you plan for your vacation locally, it will help boosting the economy back here at home.

Shopping

As of today, the prices for major retailers, including Harvey Norman or Myer, have not really adjusted the price of the imported goods in response the sharp fall of Australian dollar this year. It is largely due to the great job done by the finance departments in hedging against currency risk. However, it wouldn't take long before the hedging contract expires. As a general rule of thumb, for every 10% drop in Australian dollar, a new round of price adjustment is expected by the distributors and retailers to catch up with the currency exchange rate.

In short, if you have any plan for big ticket items to be purchased locally, for example, the latest LED TV, we advise you to execute it now rather than later.

On the other hand, online shops which are based overseas, including Amazon and Ebay, would have immediate effect on your shopping cart. It is insignificant for a DVD or a book, but branded goods or high end gadgets are certainly less appealing to Australian buyers now

Petrol

This is a interesting one - as we all know the petrol price has been going south for the longest time that we could recall. Lower global demand, higher production from exporting countries in exchange for larger market shares, are few of the reasons behind it.

However, when we rock up to any petrol station in Australia, the prices aren't really dropping or changing much. This is because the fall in petrol price has been offset by the rise of US dollar, where most of the refined petrol that was imported to Australia, is transacted in.

As such, it won't take long for us to get hit by the pump price once the oil price starts to recover., while Australian dollar remains weak.

Conclusion

Let's buy local, eat local, travel local and life goes on.