If you’re planning a trip to Disneyland, you might be better off cancelling those flights to California and visiting Tokyo’s Disneyland or London’s Harry Potter World instead.
Seen as a haven in times of uncertainty, the US dollar is surging in value while major currencies such as the Japanese yen and British pound are plummeting, as countries grapple with inflation, energy crises and looming recession.
In the past six months alone, the Australian dollar has dropped from buying US75¢ to just US65¢, meaning Australians are paying more for everything from online shopping in US dollars to tickets to “The Happiest Place On Earth”.
Savvy travellers might be wise to avoid the original Disneyland in California as exchange rates for US dollars soar.Credit:Bloomberg
“The Aussie dollar is very sensitive to financial market volatility,” said Commonwealth Bank economist Carol Kong. The bank is forecasting the dollar to drop to US62¢ by March next year, but Kong said it could fall even lower than in March 2020, when it briefly dropped below US60¢ over uncertainty about the impact of the coronavirus pandemic on the global economy.
Across the Atlantic, the British pound has crashed to record lows against the US dollar after Liz Truss’ new government announced it would fund surprise tax cuts and borrow around £290 million to do so.
Britain’s Prime Minister Liz Truss in the House of Commons in London, last Friday.Credit:AP
Chief executive of FP Markets Nick Twidale said it was only a matter of time before the pound reached parity with the US dollar. While Britons get used to their pounds only being worth slightly more than $US1, Australians are enjoying the best exchange rate on the currency since Brexit in 2016.
“That’s at very good levels if you need to buy anything from the UK,” he said.
In Japan, the central bank has had to intervene in currency markets for the first time in 25 years after the yen dropped 20 per cent of its value against the US dollar this year. Fast food giant McDonald’s cited the country’s economic woes, including rising input costs and the fluctuating yen, when it raised prices at its Japanese restaurants for the second time this year.
