Tanking
There was a time when I knew the conversion rate from the pound to the Aussie dollar almost by heart, and from the AUD to the USD, and a few others. But I realised the other day that I hadn’t checked in a long while what the pound was doing against the Aussie. When I did, it wasn’t pleasant.
That’s the five-year fall of the pound against the Australian dollar, which had been around £1 = $2.40 for a decade, and £1 = $2.20 for a decade or so before that. We travelled out there to see family and friends at the 1 January 2008 mark when things were still relatively “normal”; and again at 1 January 2010, when we really felt the hit of a pound being worth only $1.80.
Last month it dipped below $1.50. That’s a drop of almost 40% in five years. If this is the new normal, travelling back is going to cost a fortune.
At one point we were planning to go out to Oz this (Northern) summer, to introduce our daughter to her relatives and vice versa, but ended up holding off to do some work on the flat instead, rearranging bedrooms for our growing children. Maybe it’s a lucky escape.
On the other hand, everyone in Australia who knows us and has any inclination at all to visit should be booking flights now, now, now.
It isn’t just the Aussie, of course. The pound has tanked against the US dollar, the Canadian dollar, the euro, the Swiss franc, and who knows what else. We haven’t been in the States since 2005/2006, but visited relatives in Canada at £1 = $2 (September 2007) and £1 = $1.80 (February 2009), where now a pound is worth less than $1.60; visited France and Spain at £1 = €1.20 (July 2009 and April 2010), where it still is (down from a historical €1.50); and I visited Switzerland for work in late 2010 at £1 = Fr. 1.60, January 2011 at Fr. 1.50, and November 2011 at Fr. 1.45, where it is now—fortunately avoiding the plunge to Fr. 1.25 in mid-2011.
It’s all too reminiscent of a big North American and European trip we did after working for a few months in New Zealand in 1997. Having saved up thousands of Australian dollars the year before to finance it, we watched the Asian currency crisis knock the AUD from its long-term range of US$0.75-0.80 down to US$0.64 just before we travelled to San Francisco, and down and down as we kept travelling, until it was something like US$0.55 by the end of our trip. We scrimped as much as we could, most painfully ditching our plan to catch a daytime train through the snow-covered Rockies and instead travelling through them in darkness on an all-stops overnight Greyhound bus. By the time we got back to Australia in early 1998 we had only a few hundred bucks left.
In the long term, though, it isn’t the money that matters, it’s the memories of the trip. I wouldn’t have wanted to miss out for worrying about exchange rates. And at least we had the benefit of earning and travelling with pounds from 2001 to 2007, even if we were doing smaller trips without as much money at stake.
Still, camping in the Lothians this summer is looking tempting.
7 April 2012