Any expat already out there knows that currency fluctuations can be a very big deal, and it can go either way. Many of us make money in our home currency (like the US for me) and we live abroad so if the dollar strengthens or weakens, our finances shift right along with it.
Of course there are also many expats who earn in local currency, and these same shifts can make things back home cheaper or more expensive. In the worst cases, someone moves to a country like Argentina making local currency, and after a few years you can’t even afford a flight home anymore, much less the ability to live there again.
Some major shifts after a long period of stability
Over the past two years or so, the major and even minor world currencies have been fairly stable. Sure, there have been some shifts where a currency rises by 10% and then falls back 5% the following year, but for the most part there hasn’t been much currency news. Now there is.
Japan has gotten most of the headlines because the shift has been major and it seems to be stabile at the new lower rate. But there are others as well, many of which will affect many expats or just travelers in general.
1 – Japan
- 52-week high: 77.1
- July 1, 2013: 100.4
One thing Japan is famous for is its closed culture, so most of the expats there seem to be English teachers and other short-termers. And most of them are also paid in Yen, so this change is most important for the holiday crowd. Now Japan is in line with European countries like Spain and Italy, rather than like Denmark and Sweden as before.
2 – South Africa
- 52-week high: 8.05
- July 1, 2013: 9.90
South Africa is obviously popular with tourists, but it’s also a popular place for retirees, especially from English-speaking countries. Suddenly the place is almost 20% cheaper for foreigners than it was a year ago.
3 – Australia
- 52-week high: 0.925
- July 1, 2013: 1.100
Australia is an interesting one because so many of its citizens have spread around the world for new adventures. And it’s also popular with retiring Brits and Canadians in search of a better climate. It had been really overpriced, but lately it’s become reasonable.
4 – India
- 52-week high: 51.4
- July 1, 2013: 59.97
India has long been a popular expat destination for those working for multi-national companies, but not so much for normal folk. The currency slide has actually been going on for over two years now, but for inbound travelers it’s not as noticable because most hotels price rooms in US dollars anyway.
5 – Brazil
- 52-week high: 1.94
- July 1, 2013: 2.27
Brazil had been in a situation like Australia where its currency had clearly become overvalued but the government was helpless to reverse it. Fortunately for Brazil and its exports, the reverse has happened. Brazil is still expensive for many things, but for food and housing, it’s now more realistic.
6 – Turkey
- 52-week high: 1.75
- July 1, 2013: 1.94
Turkey, where I’ve lived on and off lately, is not only a tourist hotspot but also a very popular retirement country for Europeans. Since the majority of that crowd earns money or gets pensions in foreign currency, this shift has made an already affordable country even more so.