Aussie dollar soars against slumping greenback: Currency reaches near 16-month high
Australia’s currency is at a nearly 16-month high against its American counterpart - and looks poised for further gains, experts say.
On Tuesday afternoon, the Australian dollar was trading for 69.12 US cents, while on Monday it reached 69.41 US cents - its highest level since September 30, 2024.
“I mean, obviously we’ve seen an absolutely momentous move to the upside,” said City Index analyst Matt Simpson.
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By continuing you agree to our Terms and Privacy Policy.He expects the Aussie to hit 70 cents before long, a level it hasn’t reached since January and February of 2023.
Supporting the move had been soaring prices for the base and precious metals that were major Australian exports, Mr Simpson said, adding the Aussie dollar was surging even amid Donald Trump’s tariffs.
“It’s been a bit of a jack-in-the-box really,” he said of its resilience.
Besa Deda, chief economist for the accounting and advisory firm William Buck, said the Aussie was gaining in part due to stronger than expected domestic employment data, which had raised the risk that the Reserve Bank might hike rates in February.
“For the most recent kick, most of the appreciation has really come from the drop in the US dollar,” she said.
Both the Japanese yen and the US dollar had dropped in the last few days amid speculation the US Federal Reserve might intervene in currency markets - or perhaps had already done so - to shore up the yen, Ms Deda said.
But the US dollar had also been weaker all year amid all the geopolitical turmoil, she said.
“Here, 2026 opened up, and there’s just been a wave of fresh uncertainty,” Ms Deda said.
“There’s Greenland, and there’s Venezuela, and Iran, and then more recently, the threat of a 25 per cent tax on South Korea. So I think that elevated uncertainty is also contributing to a sell off in the US dollar.”
A benchmark gauge of the US dollar’s strength against other currencies fell to its lowest level since 2022, Ms Deda said.
The Aussie might climb further if quarterly consumer price data to be released by the Australian Bureau of Statistics on Wednesday shows that inflation remains elevated, she said.
“I think there is possibility in the near term, particularly depending on what the data shows tomorrow, for the Aussie dollar to break above 70 US cents, probably even maybe 71 US cents.”
Everyday Australians will mostly notice the difference in the Aussie when they go on holiday overseas, particularly to Japan and the United States.
