Thread: Aussie Dollar Record High against the Pound great news for British Expats Returning

The Australian dollar rose to 67.96 pence on Tuesday night and almost touched 68 pence. The pound has recovered slightly but is still at a historic low – welcome news for expats earning wages in Aussie dollars, who regularly convert their salaries back to sterling.
The dollar-pound exchange rate has almost doubled in the past three years so this fresh high will come as no surprise to regular observers. But its timing couldn’t be better for expats heading back to London for the Olympic Games this summer, if the rate remains at this level.
Chris Dixon, a British expat based in Melbourne, said: “Although I haven’t decided yet where to spend my summer holidays, the fact that the Aussie has hit a high against the pound may influence my decision. London is pretty expensive for a tourist with pricey hotels, restaurants and West End shows so a weak pound would be good news.”
The main reason for the low is that British and Australian economies have been heading in opposite directions. The UK economy has been teetering on the brink of recession and is caught up in eurozone woes.This is reflected in investor confidence in sterling.
But the Australian economy has been powering ahead, buoyed by its abundance of resources and minerals which are in strong demand from China as it builds countless roads, airports and homes.


Foreign traders have also had a preference for Australian dollars because of the higher official interest rates offered compared with the UK, adding to demand for the currency.
Australia’s central bank’s official interest rate stands at 4.25 per cent, compared with just 0.5 per cent offered by the Bank of England. This means overseas investors receive a higher return for their Australian dollar investments than they would their pounds.
Currency dealers said British expatriates earning wages in Australian dollars are undoubtedly one of the main beneficiaries of the high exchange rate.
However, recipients of sterling-denominated pensions have recently seen the purchasing power Down Under of this income plummet.
One currency trader said: "It is hard to see things improving and helping just the Australian dollar to rally, without also improving the eurozone. The global economy is so inter-connected, therefore what’s good for one region is likely to have a positive effect on the others.”

hope it stays that way for my planned trip back later this year!

What gets me is that they never reduce the flights back.

I hope it stays like this until we sell the house.

The downside is the high dollar is decimating what is left of the manufacturing industry in this country, also of course tourism is really suffering but we cant have it both ways.

Hey Chris when do you go back? Are you still waiting for the house, is it on the market now?

It's been a bit of a nightmare to be honest, one thing after another has delayed us, the latest was this weather that flooded one end of the downstairs bedroom. We are now hoping the end of the month to get it on the market. It's not all bad though with the exchange rate heading south. :)

Sorry to hear this Chris, so it could be a while before you get back then.