Currency Converter Guide

Record numbers of Australians are travelling overseas, with a strong Australian dollar and lower airfares making international travel ever more attractive. We’re also shopping on lots of international websites, some of which don’t automatically tell us how much our purchase will be in Australian dollars. As a result, it’s more important than ever to have an understanding of foreign exchange, and RateCity now offers a currency converter to help you figure out how much Aussie currency you’ll need to spend a specific amount in a foreign currency, or how far your Aussie dollars will get you! This guide explains how and when to use the currency converter.

Contents

1. How to use the currency converter

Our currency converter is a very easy way to check your foreign exchange calculations. You can use it in one of 2 ways. You can start with the currency you have – let’s say you have $2000 in Australian currency in your savings account as your spending money for a trip to Bali. You can enter this amount into our currency converter, and ask to see how many Indonesian rupiah you would get in return. Or, you can start with the currency you need. In this case, you’d specify an amount in a foreign currency. Say for example you’re planning to stay at a hotel in Los Angeles, and you know it will cost you US$150 per night for 3 nights – or US$450 in total. You could use our foreign exchange calculator to find out how many Australian dollars you’d need to have US$450 available.

2.Why do the exchange rates change?

Most international currencies “float”, meaning that the relative value of them is set by traders around the world buying and selling in different currencies. While some governments set an exchange rate, most fluctuate. Foreign exchange is traded around the clock, around the world. Despite the fact that markets may be closed in Australia, other markets are open, and so trading activity really is 24 by 7. As a result of this, foreign exchange rates can literally change minute by minute. The Australian dollar, for example, can be worth 104 US cents in the morning, then 102 by the afternoon. For most of us, the change within a day probably won’t make the difference between taking a trip or not, but rate changes can mean a nasty surprise, so it’s important to check in regularly. Obviously, rates can move much more over time – the Aussie dollar has been worth less than 50 US cents at various times in the last 15 years, as well as well over $1 in more recent times.

3.Tips for ordering cash

There are several different ways you can order cash in a foreign currency before your overseas trip. Perhaps the easiest is to visit your own bank – almost all banks can convert Aussie dollars, although you should check if you need large amounts of any currency, or anything outside the most popular currencies such as the US dollar, NZ dollar, Euro or pound – you may need to visit a larger CBD branch for this. You can also use one of the many foreign exchange or “bureaux de change” offices you’ll see around town. You could also use a service such as American Express or Travelex. The advantage of these services is that they’re simple and fast – you could literally get the $500 in US currency you need within an hour on most business days. If you’re on your way to the airport and have forgotten to get any cash for arrival, there’s always foreign exchange services at Australian airports. There are a couple of important downsides about ordering cash in advance. First, security – you should always be careful about carrying large amounts of cash; it’s a good idea to have only a modest amount of cash on you when you arrive, and instead use a debit or travel card through your own bank’s ATM network overseas to minimise cost.

Second, you need to check fees and commissions. While some services offer low fees and no commissions, others can be quite expensive. They’re all required to tell you these fees, but check and compare them, and obviously look for the lowest possible fee. Finally, check the exchange rate using our currency converter. We can’t guarantee it will be same, because these rates move every minute. But it will give you a guide – if a foreign exchange service is significantly different from a rate you saw an hour before, that’s reason to shop elsewhere!

4.Coming soon…

This is the first version of RateCity’s currency converter. We’ll be adding lots more features to help you with the foreign exchange challenge. These will include “live quotes” from several foreign exchange providers, from whom you can buy your foreign currency online, straight away. We’ll also include details of travel and debit cards, which can be a better alternative to carrying lots of cash. Finally, we’ll be offering travel insurance comparisons, because regardless of which currency, and where you go, it pays to have insurance for unexpected events.