The smart move here is to book travel now and pay before the final cherry blossoms drop early in the second quarter of the year when it’s possible Japan’s government will intervene to support the yen – “But even that would likely be temporary,” Attrill said.
“At current levels around 110 yen, travellers shouldn’t regret getting their yen on board now or paying in advance for holidays later this year,” Attrill said. “Even if the exchange rate could push somewhat higher in the near term.”
Japanese monkeys at Hakodate Tropical Botanical Garden in Hakodate city, Hokkaido, northern Japan. AP
Commonwealth Bank expects the Australian dollar to reach 112 yen by year’s end, according to Samara Hammoud, the bank’s international economist and currency analyst at of Australia.
Across the Tasman, the Australian dollar is at its highest level against the New Zealand dollar since 2013. Commonwealth Bank forecasts the AUD/NZD to edge higher over 2026 – “supported by solid risk sentiment and interest rate differences between Australia and New Zealand”, Hammoud said.
But skiers eyeing Queenstown, where some ritzy new hotel openings are pushing up average room rates, might want to lock in next season’s trip sooner rather than later. ANZ predicts a 3¢ fall (from $1.17 to $1.14) by December.
While Europe looks stuck in neutral, Australians headed for the UK may fare better, according to Mahjabeen Zaman, head of FX at ANZ.
“With the Reserve Bank of Australia raising the cash rate while the Bank of England remains in easing mode, the pound is expected to weaken against the Aussie,” she says. “China is also worth considering, with AUD/CNY now testing 2021 highs.”
The Aussie hit $US0.71 on Thursday, a three-year-high. For trips priced in greenbacks – covering not just America but much of the Americas and the cruise industry – Hammoud’s advice is simple: act now.
“We expect there is room for AUD/USD to rise modestly in coming months, but gains are likely to be limited and short-lived,” she said. “Booking soon is sensible. We expect it to ease by the end of 2026.”
As mortgage holders know all too well, the Australian dollar’s recent strength largely reflects the Reserve Bank of Australia’s January hike, which moved against the global trend. Matt Bowen, head of consumer insights at ING Australia, is keeping cost-of-living pressures in mind. His smart-money destination pick is Bali.
The Exuma Chain, in the southern Bahamas. Caribbean
“The Indonesian rupiah is at all-time lows against the Aussie, offering unprecedented value,” he said. In the last 12 months alone the rupiah weakened by 14 per cent againt the Aussie to make even Bali’s top resorts, from Capella Ubud to Amankila, more accessible.
Commodity prices, China and inflation will all play their part in the Australian dollar’s next movements. Attrill is watching the markets for signs of a major stock market correction or serious geopolitical flare-up. “The Australian dollar is still a risk-sentiment currency – it falls whenever bad things happen.”
Zaman, meanwhile, is watching Donald Trump – as are we all.
“US policy uncertainty has been a key contributor to recent US dollar weakness,” she said. “That will matter too.”
