Yahoo Finance The Aussie dollar is the grinch stalking Christmas
A weak Australian dollar is sucking the joy from Christmas, making the holiday season expensive and difficult. But there are still some ways to make the most of it.
As the next chart shows, Australia’s dollar is down against almost all currencies over the past 2.5 years. Japan is an obvious exception.
Australia’s dollar is down against the Chinese yuan compared to three years ago but, in recent times, it has recovered a little. That’s because the Chinese financial system and economy are teetering on the precipice.
That means it’s going to be another big ‘Made in China’ Christmas. Our dollar fetches a perfectly credible 4.7 Chinese yuan, and that means Chinese goods are still good value. Your toys, your socks, all the things we bring in from China - from stocking stuffers to big-ticket electronics - will all still be reasonably priced.
Also read: China and the Aussie dollar: Australia's next big economic hurdles
Also read: Top value travel destinations on the Aussie dollar right now
If you can find goods made in Japan, they’ll be good value too, but mostly what we import from them is Toyotas, Nissans and big Komatsu diggers rather than suitable things for Santa to deliver.
If you would like someone to know you spent a lot of money on them, buy something Swiss. Swiss Chocolates or watches would be a very extravagant way of showing someone you care, given our exchange rate against the Swiss Franc. Equally, you could buy something made in the USA. Our dollar is in a parlous condition vs the US dollar, buying just 64 US cents. This means American goods are going to be more pricey. Hershey’s chocolates and other American goodies you buy straight off Amazon are like diamonds right now, thanks to the exchange rate.
Holiday headaches
After Christmas, minds will turn from presents to travel. This is where our weak dollar can really hurt you. Almost all our favourite destinations have currencies that are strong against ours.
Seeing family in Europe? Expensive. Visiting South-East Asia? Expensive. Want to go skiing in America? This year that is going to bleed you dry.
The price of a one-day ski ticket in the US is now topping out at US$299 in some popular resorts - a dramatic increase from just a few years ago. Combine that with our exchange rate, and you’re looking at $465 for a single day on the hill. It’s eye-watering. That’s before you even rent any ski equipment or sip your first Coors Light.
At the start of COVID, one of the earliest incursions of the virus came from Australians holidaying in Aspen. There was a bit of an Australian invasion of Aspen last decade when our dollar was strong. But I promise you there will be far fewer Aussie accents there this year – the price of visiting America is up dramatically.
It’s highly unlikely we will see Australians returning to America in the numbers we did pre-COVID. Not any time soon.
Jetset to Japan
Skiing in America is an especially crazy choice when you consider the alternative: Japan. Our dollar is up against the yen, and a ski ticket in Japan costs 9,500 yen at Niseko. That’s about $99, meaning four days in Japan would cost less than a single day in America. Naeba is cheaper at 7,000 yen ($73). A small resort like Kamui links can be even cheaper at 6,000 yen ($63).
Skiing in Japan is in major decline among the locals. In the 1990s bubble, they built far more ski real estate than they use now, which means there’s cheap real estate to be had around some of the resorts. The craziest example of this is some apartment buildings near the mountain town of Yuzawa, a couple of hours from Tokyo by shinkansen. You can buy a small foreclosed apartment for 10,000 yen, or $105. The catch is they are desperate for people to pay the maintenance fees, which haven’t been paid for a while!
Japan’s situation over the past 10 years has been depreciation, or falling prices. The opposite of what we have seen in Australia. That is making Japan far cheaper to visit than many people imagine.
The relief of finding prices lower than expected could be the exact sort of holiday a lot of us need after the events of the past few years.
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