Australian dollar surges to three-year high in 'absolutely momentous' change - here's what it means for you
- Aussie dollar traded for 70 US cents
- Experts claimed it could rise even higher
- READ MORE: Has the Chinese tourism bubble burst for Australia?
Australia's currency has reached a three-year high against its American counterpart - and looks poised for further gains in welcome news for Aussies considering international travel.
On Wednesday morning, the dollar reached 70.1 US cents after a 1.4 per cent jump, which City Index analyst Matt Simpson described as an 'absolutely momentous move to the upside'.
The dollar has been taking off in recent days. On Tuesday afternoon, it was trading for 69.12 US cents, while on Monday it reached 69.41 US cents - its highest level since September 30, 2024 - before jumping even further this morning.
Mr Simpson said the Australian dollar's benchmark at 70 US cents is a level that hasn't been 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 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.
The Australian dollar reached 70.1 US cents on Wednesday (stock image)
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,' she added.
Everyday Australians will mostly notice the difference when they go on holiday overseas, particularly to Japan and the United States.
