What is the exchange rate and how does it affect your travel budget?
Thinking about exploring a new country? We explain what foreign exchange rates actually represent, why they matter for your travel budget, and the smartest ways to manage it.
Table of contents:
Planning a trip overseas? One of the most important – yet often overlooked – factors is the exchange rate.
It may seem like just a number, but it directly influences how far your Australian dollars will stretch abroad. In this guide, we’ll break down what the exchange rate really means, how it can impact your holiday spending, and how to stay one step ahead with a smart travel money strategy.
What is the exchange rate?
The exchange rate tells you how much of one currency you’ll get in return for another — for example, how many Japanese yen or US dollars you’ll receive for one Australian dollar (AUD). It’s a crucial metric for international travel, shopping, and budgeting.
You might see different types of rates:
- The mid-market rate (also known as the interbank rate) is the rate banks use when trading between themselves — but it’s not typically what travellers receive.
- The retail exchange rate is what you get when buying travel money from a provider. This can include a margin or fees.
- Airport kiosks and overseas bureaux often offer the least competitive rates, especially for last-minute travellers.
In short, while the exchange rate may look like a small percentage change, it can mean a big difference to your holiday funds.
How exchange rates affect your travel budget
When the exchange rate moves, so does your purchasing power. Let’s say you’re heading to Europe: if 1 AUD gets you €0.60 instead of €0.65, you’ll get less for every dollar — which could mean skipping that extra meal or attraction.
Daily expenses like meals, metro tickets, and souvenirs quickly add up. An unplanned dip in the exchange rate might mean cutting corners or tapping into emergency funds.
Take this example: a $3,000 AUD travel budget could offer a week of comfort in Thailand — but in the UK, where the Australian dollar is weaker against the British pound, that same budget might barely stretch to cover essentials like accommodation and local transport. Exchange rates don’t just influence prices — they shape your entire travel experience.
Why exchange rates change
Currency values shift constantly due to global economic activity. Factors like inflation, interest rates, trade agreements and political instability can all influence how strong or weak a currency is.
For instance, news of a rate rise by the Reserve Bank of Australia (RBA) may strengthen the AUD, while global uncertainty could push it lower. These changes can happen daily — which is why reserving your currency in advance can protect your budget from sudden swings.
Tips to manage exchange rate impact when travelling
It’s not about predicting the market — it’s about being prepared. Here’s how you can keep more in your pocket when heading overseas:
Lock in your rate early
The best way to avoid nasty surprises is to reserve your foreign currency in advance. By locking in the rate with Prosegur Change, you protect yourself from last-minute fluctuations — and you enjoy 0% commission when you book online.
Compare before you buy
Check online exchange rates before accepting airport or hotel counter offers. Remember, it's not just about the rate — it's about the total amount you’ll receive after all fees.
With Prosegur Change, what you see is what you get.
Mix your payment methods
Using a combination of cash and card gives you flexibility. Small vendors and local markets may only accept cash — while cards can be handy for hotels and online bookings.
Plan destination-specific budgets
Aussie travellers headed to Japan or Indonesia can usually stretch their AUD further than those going to the UK or US. Do a little research and budget accordingly to get the most from your trip.
Still unsure how it all works? Here are some quick answers to common concerns from Australian travellers.
Questions Aussie travellers often ask about exchange rates
Because currency values are affected by supply and demand in global markets, they fluctuate constantly based on financial news, trade, and political factors.
Generally, it’s better to exchange your money in Australia before you go — especially if you reserve online. Overseas rates can be lower and may include unexpected fees.
Look at the full picture: the rate, any commission, and how much you’re actually getting in return. Online reservation services like Prosegur Change show you upfront what you’ll receive, with no hidden costs.
Take a mix of cash and card. Reserve your currency in advance, keep small denominations on hand, and avoid last-minute exchanges at airports or hotels.
How Prosegur Change helps travellers in Australia
At Prosegur Change, we’re committed to making foreign currency simple, secure and stress-free. With over 30 years of experience, our online reservation system helps you lock in your exchange rate and pick up your currency at one of our 15+ Australian branches, including major airports.
Start your trip with confidence:
- 0% commission when reserving online
- More than 50 currencies available
- Trusted by thousands of Australian travellers every year
Ready to plan ahead? Reserve your currency now
Make the most of every Aussie Dollar
The exchange rate can make or break your holiday budget — but it doesn’t have to be a gamble. With the right planning and the support of a trusted provider like Prosegur Change, you can travel smarter and stretch your money further.
Before you go, check our live rates at Prosegur Change and find your nearest branch to reserve your currency today.
