In economic circles, the Australian dollar is known as the ‘little Aussie battler’.
Since it was floated in 1983, it has been consistantly battered by stronger currencies such as the UK pound sterling, the US dollar and the Japanese yen.
However, over the last few years, those times have changed. The strong economy and expected interest rate increases in 2010 have economists predicting that the value of the Australian dollar will continue to rise from its already soaring heights.
The Aussie dollar is expected to reach parity with the US greenback in the first half of this New Year, the first time this has happened since the dollar was floated.
What does this mean for young Australians? It will be a great year to spend. Raised in prosperity, Generation Y is certainly a well-qualified generation for such an activity.
A strong currency means it’s a great time to purchase overseas goods with Australian dollars. So if you’re considering an international student exchange or finally taking that backpacking adventure with your mates, 2010 could be the best year to do it.
Generation Y need no further incentives to spend overseas. Their financial independence and the increasingly competitive travel industry mean that young people of today can already decide to go snowboarding in Japan, take their girlfriend to Paris or follow their favourite soccer players to the World Cup in South Africa.
But today, in this globalised online world, it’s also very easy to spend our Australian dollars overseas without leaving our homes.
An increase in the value of the Aussie dollar will also trigger an increase in purchasing goods from overseas, as imported goods will now become cheaper. It could be in the form of businesses importing raw materials or individuals buying clothes from the US via Ebay.
2010’s students have more financial freedom than their parents did. There are a range of reasons for this; many Gen Yers take a gap year to experience full-time employment, while others work part-time as they study.
Australian tourism and hospitality has been booming for most of the past decade, which has allowed much of Gen Y to find casual employment in these industries.
Many gap years are spent waiting tables on Hamilton Island, whilst others students fund their university years by parking cars and pulling beers.
But will a strengthening dollar encourage students to bite the hand that feeds?
If a stronger dollar encourages foreign expediture, travelling inside our own shores will become less attractive. Who wants a Queensland beach holiday when for half the price you can travel to South-East Asia?
Eventually, the pressure could deflate the Australian travel industry and potentially, student employment.
Should students be concerned? Maybe, but over the past few years there has only been one thing predictable about the economy, it’s been consistently unpredictable.
However, despite the economic turmoil of the last couple of years, there will be no better time in your life than now to go on an international exchange or explore different parts of the world.
So, grab those passports, pack your bags and grab a handful of Aussie dollars.
It’s time to enjoy the prosperity and ride the little Aussie battler that could.
Ryan Jon is an honours student at Swinburne University. He is also completing a Graduate Diploma in Journalism at La Trobe University.
