The ‘sweet spot’ for holidays where the Aussie dollar is getting stronger

1 day ago 5

January 6, 2026 — 5:00am

Feeling poor when you’re travelling in Europe or the US? Over the past decade, the Australian dollar has been in a general decline against several major world currencies. Since January 2016, our dollar has fallen 8 per cent against the US dollar, 15 per cent against the euro but just 0.5 per cent against the British pound.

However over the past year, our dollar has gained almost 8 per cent against the US dollar and 0.5 per cent against the pound, but against the euro our dollar is worth 4 per cent less.

Japan’s Hakuba Valley is a good option for snow seekers, with the Aussie dollar up 19 per cent against the yen since 2016.iStock

One of the bright spots is the exchange rate for our dollar against the Japanese yen. In January 2016, one Aussie dollar was buying just 80 yen. Today that same dollar buys 19 per cent more, and 7 per cent more than a year ago.

Exchange rates fluctuate all the time, but take heart. In March 2020, at the beginning of the pandemic, the Aussie dollar took a deep dive, falling 16 per cent against the US dollar, 17 per cent against the euro and 5 per cent against the British pound. It was also down 6 per cent against the Indonesian rupiah and 4 per cent against the New Zealand dollar. All those losses have since been made good, against some currencies more than others.

Since December 12, 1983, the Aussie dollar has been a floating currency, its value determined by market forces. Before that date, our dollar was fixed, pegged initially to the British pound, then to the US dollar and later still to a basket of currencies. A fixed dollar inflated the value of our dollar, great when we travelled overseas but not so great for our export industries, and Australia’s economy lives or dies on its exports of minerals and agricultural produce.

The market forces that determine the value of our dollar are largely beyond our control. The world’s appetite for our commodities, the state of China’s economy and US interest rates are just some of the determining factors. Also, our dollar is not a major world currency. Large institutional investors including hedge funds, banks and pension funds trade the Australian dollar. Their trading patterns and short-term speculative bets can cause sudden spikes or drops, even when the fundamental value of our dollar remains constant.

A holiday in destinations like Nha Trang in Vietnam offers exceptional for Australian travellers.Getty Images

For anyone looking to get the best value out of their travel dollars, South-East Asia is the sweet spot, with Vietnam in the spotlight. Accommodation, dining, transport, shopping and spa and beauty treatments in Vietnam offer outstanding value, helped along by an Aussie dollar that has risen 12 per cent against the Vietnamese dong over the past year. The figure is the same for Indonesia’s rupiah, although we’re down 1 per cent against the Thai baht.

Europe is where the falling Aussie dollar bites hardest, but accommodation and food cost less in the former Eastern bloc countries, particularly in the non-euro zone. Examples include Poland, Romania, Albania and Montenegro, despite falls in the Aussie dollar against some of those currencies including the Polish zloty, down 6 per cent over the past year, and 2 per cent against Romania’s leu. The Australian dollar is on a roll against the Turkish lira, rising by over 30 per cent since January 2025, however average hotel prices in Turkey have seen a massive rise over that period, so there’s more pain than gain in a Turkey trot.

Our dollar is up more than 4 per cent over the past year against the New Zealand dollar, but accommodation prices in hotspots such as Queenstown and Rotorua have outstripped any gain in our currency.

There are plenty of ways to pay less when you travel, from booking well in advance to how you pay your bills overseas, and a debit card with low transaction fees is key. The Wise and Revolut cards are prime examples and Macquarie Bank’s debit card is a red-hot contender. Don’t bother getting a travel money card, they only do what a debit card does and charge you more for doing it. True, they lock in your funds at the current exchange rate, but you only win if the value of the Aussie dollar falls, and that’s not a sure bet.

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Michael Gebicki is a Sydney-based travel writer, best known for his Tripologist column published for more than 15 years in Traveller. With four decades of experience, his specialty is practical advice, destination insights and problem-solving for travellers. He also designs and leads slow, immersive tours to some of his favourite places. Connect via Instagram @michael_gebickiConnect via email.