Major currency swings are changing some expat choices

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Economically speaking, there are two main types of expats. Those working for an international company or with some other form of locally-based salary, and those whose income or savings is based on their home currency.

Having traveled all around Asia for the past 18 months I’ve discovered that there are many semi-retired people living on American or European pensions all over, and things for these people have been getting interesting in quite a few places lately.

Currencies swing and then swing back in almost all cases

Those who haven’t been following currency shifts for very long, or those who don’t look at the long-term charts, often incorrectly assume that things just keep going in the same direction based on the incompetency of their government. But in reality, every major currency (Canadian dollar, Aussie dollar, Japanese yen, Euro, British pound etc) has just gone back and forth over the decades.

While it’s impossible to know precisely which direction each currency is headed in for the year ahead, you can be reasonably certain that strong currencies will weaken and weak currencies will strengthen in the not too distant future. With this in mind, there are some really good bargains out there at the moment, and some places you’d be better off avoiding for a while.

Expensive places to be an expat at the moment

Australia – While the Aussie and US dollar are always moving back and forth, two years ago the US dollar was worth about 1.5 Aussie dollars, and today it’s worth only about 95 cents, making things brutally expensive there. New Zealand has also gotten a lot more expensive lately.

Switzerland – Sure, not many expats dream of retiring in Switzerland based on affordable prices, but it’s still worth mentioning that everything is astonishingly expensive there lately. The Swiss Franc would hover at around 1.20 to the US dollar, but now it’s about 76 cents, so even changing planes at Zurich Airport might be beyond the reach of many.

Japan – Very similar to Switzerland in that a country that has always been expensive is suddenly insanely expensive due to a rising Yen. A rate of around 120 per dollar is now around 77 per dollar.

Cheap places to be an expat at the moment

Argentina – The Argentine peso was famously devalued in 2002, and suddenly the country was extremely cheap for just about everyone, but most assumed that wouldn’t last long. Inflation in Argentina is eating away some of the benefit, but still 3 Argentine pesos per dollar a few years ago is now 4.15 to the dollar today. This is a good place to consider setting up shop in if you can make money in another currency.

Turkey – I’m currently writing this in Turkey, where I’ve been living since April, when the Turkish lira was about 1.51 to the US dollar. Today, even with all the problems in the US economy, I am getting 1.76 Turkish lira for the US dollar. Turkey has been a good bargain, and for some reason it’s been getting cheaper for almost everyone lately.

Vietnam – A popular country for English teachers and digital nomads alike, Vietnam’s currency has lost almost 10% value in the past year, even while most others have been gaining against the US dollar. This is already one of the cheapest countries in the world, with US$10/night hotel rooms easy to find, and it’s getting cheaper lately as well.

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