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The Australian dollar’s sudden push toward 70 U.S. cents raises an important question: why is global money backing Australia again when households still feel under pressure? Even if relief hasn’t arrived yet, the move is telling us something about where the economy is heading. Markets are starting to treat Australia as steady, resilient, and worth backing again. That shift matters more than most people realise.
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Historically, 70c has been the sweet spot for the Aussie dollar. When it’s around the mid-60s cent-wise, Australia effectively imports inflation. Fuel, electronics, cars, and everyday goods all then get more expensive. Above the mid-70 cents, exporters start to feel real pain as margins compress.
Around 70c sits the balance point: Strong enough to ease inflation, but not so strong that it chokes off growth. That’s why this move matters.
Let’s start with the obvious. Your Bali trip just got cheaper. Flights, hotels, shopping overseas, and anything in U.S. dollars now cost less. Imported goods follow the same logic. Phones, cars, electronics and clothing stop creeping higher when the dollar strengthens. Not overnight, but it shows up eventually.
This is where the conversation usually gets lost. A stronger dollar doesn’t magically fix the cost-of-living crisis, and anyone who promises it is selling fantasy. Rent doesn’t fall because the Aussie dollar ticks higher, and insurance bills don’t ease because of foreign exchange moves. Electricity prices don’t care what the currency is doing. Those pressures are home-grown, policy-driven and deeply structural.
What the dollar does do is stop things from getting worse. When the currency is weaker, every imported item quietly adds fuel to inflation. That pressure has now eased. Households aren’t winning yet, but they’ve stopped losing ground on that front.
This shift also matters for interest rates. A rising dollar takes pressure off inflation, and inflation is what keeps the RBA awake at night. The stronger the currency, the less urgent the case for higher interest rates becomes. That doesn’t mean cuts are coming tomorrow, but it does mean the RBA can breathe a little easier.
But, there’s a trade-off. Exporters feel the pinch when the dollar rises. Miners, energy producers and agricultural exporters can see margins tighten, but Australia sits in a rare position. Global demand for our resources remains strong, and buyers still need what we dig out of the ground. That softens the blow.
For everyday Australians, the real takeaway is perspective. The dollar’s move is a signal, not a solution. It tells you inflation pressure is easing at the edges. It shows that global money is flowing back to Australia and suggests things are stabilising, even if they’re not comfortable yet. Watch the dollar the same way you watch the weather. It won’t decide your entire future, but it shapes the conditions you live in. Right now, the wind has shifted slightly in Australia’s favour.
And yes, enjoy the cheaper Bali cocktails while you can.
For now, good luck and good trading.
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Dale Gillham is Chief Analyst at Wealth Within and an international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au.
Disclaimer: While Wealth Within holds an Australian Financial Services License (AFSL:226347), the information featured in this program is general in nature and therefore should not be relied upon.Before making any investment decisions, you should consult a licensed professional who can advise whether your investment decisions are appropriate for you.
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