# Against which country is the AUD the strongest?



## archilles (23 June 2009)

Hey all, 

I was wondering against which country is the AUD the strongest? 

I know we get more bang for our bucks in Thailand, but that's the only country i know of as of yet -surely there are others ( yes i'm an amateur  ).

Can anyone tell me of any other countries where our aussie dollar would perfom well in , especially if I wanted to buy and import things to Australia ? 

I tried to find this type of information using google but i can't seem to track it down.


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## bellenuit (23 June 2009)

archilles said:


> Hey all,
> 
> I was wondering against which country is the AUD the strongest?
> 
> ...




You could try The Economist's "Big Mac Index" (no, I am not joking). This is a blurb on it:

http://www.economist.com/markets/bigmac/

Read the explanation and watch the video clip to understand what it is about.

This is a link to the most recent index:

http://www.economist.com/markets/indicators/displaystory.cfm?story_id=13055650

I would concentrate just on the "Big Mac Prices in dollars" column (that is $US). That, for instance, is telling me that based on the exchange rates as of Jan 30th 2009, a Big Mac cost the following (all are quoted in $US):

In the US - 3.54
In Australia - 2.19
In Switzerland - 5.60
In Thailand - 1.77

So just comparing those 4 countries, ignoring transportation and other additional costs, if you wanted to purchase a Big Mac, the cheapest to dearest are Thailand, Australia, USA and Switzerland.

Now assuming that the comparative cost of a Big Mac in each country shown on the table is indicative of the comparative costs of all products in those countries, that would suggest the best places to source products are Malaysia (1.52) followed by South Africa (1.66), Hong Kong (1.72) etc.

The reason a Big Mac was chosen is that it is almost identical in every country so it is as good as any and better than most as an indicator of relative costs. Of course, if you are talking about importing to Australia, you must take into account other factors such as shipping costs etc. Also, irrespective of the index, there are local factors that come into play, such as access to raw materials. For example, coconuts in Thailand might be comparatively cheaper than the index suggests, due to the abundance of supply.


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## theasxgorilla (23 June 2009)

I can tell you right now it's the Swedish krona.

Buying 6.4 crowns with 1 Aussie dollar means you're getting a favourable exchange rate at levels not seen since 1985.

Combine that with the relative property prices, car prices and other general inflation levels, Sweden flat or down, Australia flat or up, and you can take your AUDs to Sweden and live like a king.

Comparing Big Mac meals is "cute" and all, but it doesn't measure the broader relative cost of living while factoring in some measure of standard of living eg. what car did you drive to MacDonalds? What were you wearing when you ate your Big Mac? Could you get out your 3G device without having to worry about adequate network coverage, or how much it would cost to use because you had an affordable flat-rate all-you-can-eat plan?  How long did it take you to get to MacDonalds? Was it a nice motorway drive, or did the country you bought the Big Mac in neglect to build decent infrastructure so they could keep the price of Big Mac's down? 

Of course for the purposes of importing something, the above "quality" measures are neither here nor there.


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## Robb (23 June 2009)

As bellenuit was alluding to, you need to look at some form of purchasing power parity (PPP) list, comparing a 'basket' of goods, or the 'real exchange rate'. How this would help you import items here to take advantage of these price discrepancies probably doesn't really help, as there are allot of boundaries.. 
Useful if you are planning on going on a holiday (for example I have heard that watches can be allot cheaper in Singapore, almost to the point where you can fly there buy the watch and come back for the same price to what is available here) etc, but starting an import business from it would be difficult..


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## bellenuit (23 June 2009)

theasxgorilla said:


> Comparing Big Mac meals is "cute" and all, but it doesn't measure the broader relative cost of living while factoring in some measure of standard of living eg. what car did you drive to MacDonalds? What were you wearing when you ate your Big Mac? Could you get out your 3G device without having to worry about adequate network coverage, or how much it would cost to use because you had an affordable flat-rate all-you-can-eat plan?  How long did it take you to get to MacDonalds? Was it a nice motorway drive, or did the country you bought the Big Mac in neglect to build decent infrastructure so they could keep the price of Big Mac's down?




We are probably not disagreeing, but my assumption was that Archilles wanted to buy products in that country in order to bring them back to Australia. The issues you have raised relate more to factors to be considered if you were planning to migrate to one of these countries. I agree, your Australian dollars might go a lot further in many other countries, but would you want to live in those countries. Somalia wasn't on the table, but I'm sure it is a loss less costly than Malaysia, but would you want to live in Somalia.

As a comparative cost index, the Big Mac Index is probably as good as any. Obviously if Archilles has some idea of what he wants to buy, he might be better off just doing a Google search on those products with specific country names in the search argument and seeing what comes up.


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## noirua (26 August 2009)

The AUD is very strong against the GBP at around AU$1.95 and may well strengthen as UK interest rates are set to remain at 0.5% and Aussie rates look likely to increase a lot earlier. [hopefully this is the case as I transferred some GBP back into Aussies during February and March - having read a few helpful posts on ASF]

Where will the rate finish up? Well, I'm going for AU$1.90 - GB£1 in the next 3 months and about AU$1.85 - GB£1 by the end of the year.


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## whereu (26 August 2009)

Have you had a look at the South African Rand? If my maths is correct the Australian dollar buys about 6.5 Rand. I visited South Africa in the second half of 2008, and found most prices to be very favourable.


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