With only a finite amount of airtime available on a nightly news broadcast, there are many newsworthy events that don’t make the final cut. However, there is one constant throughout and its focus is on the movement of a single rate.
The Australian dollar is a rate worth watching. It’s a clear indication to consumers of Australia’s financial performance on the world stage. On this page, you'll be able to see how the AUD is performing right now, its historical fluctuations and get some insights into what to do when it's high or low.
The Australian dollar has fluctuated greatly since its introduction as a currency in 1966. It’s considered "high" the closer it comes to being on par with the US dollar. When the dollar is high:
- Consumers can take advantage of cheaper international shopping
- Small businesses can import international goods at lower costs
- An increase in living standards across Australia due to the availability of better quality goods at reduced costs
- The RBA is less likely to rise the cash rate when the dollar is high
- Cheaper travel for Aussies, meaning more bang for your buck when you decide to go overseas
Just as the Aussie dollar has its highs, it also has its lows. The further the dollar edges away from the US dollar (usually anything below $US0.90), the lower its value is considered to be. When the dollar is low:
- Buying internationally is more expensive
- It’s good news for small businesses as this usually encourages domestic spending
- Business exporters can also win, as there is increased competitiveness because of the lower exchange rate
- Those in the tourism industry benefit because of international tourists taking advantage of favourable exchange rates and Aussie tourists looking to save money by vacationing at home
Depending what side of the Aussie dollar fence we’re on, the grass might seem greener for some than others. Keeping track of the changes can help you better understand how far your own dollars will go, and the best way to help them go even further.