Exchange Rate

The exchange rate from American dollars to Australian dollars appears to be in our favor. It only takes 67 US cents to buy $1 worth of goods in Australia. So when we walk into a store, we mentally take 33% off all the prices to get an idea of what it will cost in American dollars. 

$100AU = $67US (this rate fluctuates all the time but has hovered around this number while we've been here.)

But it is actually a little better than that. The price displayed in Australian stores *includes* the tax. In the US, we'd have to add about 8% for sales tax at the register.

Something that is labeled as $100US actually costs $108US or $161.19AU.

So if I account for the sales tax I *don't* have to pay here, I can actually shave off another 8%(almost) from the labeled price. 

$100AU / 1.08 to find the pre-taxed amount of = $92.59AU = ~$62US

So compared to how I evaluate prices in the US, I can actually estimate .62 times the labeled price in Australian dollars. 

That makes it pretty fun to spend money here. 

But should I be so thrilled? It depends on what I'm buying.

I've heard Aussies moan (winge) about how off balance the exchange rate is. They actually think it isn't a good time to make a trip to the US and have to spend their money there. It can be deceiving because they are both the same denomination of "dollar." So let's look at the actual price of items here versus there for an accurate evaluation.

Apples $5.90AU/kg = $2.68AU/lb = $1.66US/lb

Loaf of bread $4.30AU = $2.67US

Chicken breast $11AU/kg = $5AU/lb = $3.10US/lb 

Dozen egg $7.00AU = $4.34US (I used to pay $1/dozen, but prices have changed to be similar, but still less)

Ben and Jerry's pint $14.50AU = $8.99US (double the cost in the US!)

KFC crispy chicken sandwich $5.95AU = $3.69US

McDonald's soda drink $2AU = $1.24US

600mL/20 oz. soda at the store ~$4AU = $2.48US (this is probably double the cost of the US)

Petrol/gas is $1.80AU/liter = $6.80AU/gallon = $4.59US/gallon (I didn't adjust for tax here because prices in the US also include taxes in the labeled price)

Movie ticket $26AU = $17.42US (also, not adjusted for tax. Utah theater is about $13-14.)

Organix Shampoo 385mL,  $23 = $14.26US (more expensive than US)  

All of the above is pretty much what the cost is in the US(except where noted). So there isn't really any benefit to having US dollars here, and some items are more expensive.  

But Tim Tams! They are marked at $4.50AU but can often be on sale for $2.25AU = $1.39US. That is definitely less than the $5 I pay in the US! But it's an imported good. That's to be expected.

Fish and Chips are an entity unto themselves. I can get a large basket of thick chips (fries) for ~$6-8AU = $3.72-4.96US. This is not an order of "large fries" like in the US. It is 3-4x as much food. You could actually make a meal of it. TWO people can make a meal of it.

And we have. Too often. 

Clothing is cheaper, at least in the stores like Target and Kmart. I wonder if it's because most things are made in Asian countries and Australia is just closer to them so shipping costs are lower. 

I bought a nice calf-length cardigan for only $15AU! That's $9.30US!

I also found a dress I like for $30AU = $18.60US. And it has sleeves! No pockets, though. 

Other household items you'd buy at Target or Kmart are cheaper here. I bought a nice store brand pressure cooker here for $62AU = $39.44US, and I'm quite certain it is the same as the Cuisinart I bought in the US for $89US. But if I actually bought the Cuisinart brand here it would be in the $169AU ($105US)price range.

Costco is interesting. I can find familiar items there, and they tend to cost less than items in the grocery store, but are still more than what I pay in the US and aren't really worth the long drive to get them. 

Chocolate chips at Costco here are $19.99AU = $12.39US. I can usually get them for $8.99US in Utah. 

A bag of tortilla chips are $9.99AU = $6.19US, but the bag is about half the size of the one I'd get in the US. 

Hotel prices and plane flights already vary widely, but are consistent in price when traveling between countries so those things are not impacted by an exchange rate. Clothing and household goods at Target may cost more in the US, but those are not things you're really buying when you go on vacation. You'll be buying food and venue entries, and some of those things are considerably cheaper in the US. 

So Aussies don't need to worry about the exchange rate. It only appears imbalanced because our countries use the same denomination of dollars, but the actual cost is consistent between the two countries. 

All my Aussie friends need to come for a visit! You don't even need to worry about the price of a hotel. I have a spare room you can stay in for FREE!