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The Australian dollar is continuing to strengthen against major currencies, with the Aussie pushing above 72 US cents and reaching its strongest level against the euro since late 2024.
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The currency was trading around US72.2c on Wednesday, after briefly reaching a four-month high against the US dollar earlier in the week. The Reserve Bank of Australia’s latest reference rates put the Aussie at US72.1c and €0.6 as of Tuesday afternoon.
Against the euro, the move has been particularly notable. The Australian dollar reached €0.62 on Tuesday, according to Wise, its highest level against the European currency on record for that data series.
The Aussie’s gains come as markets reassess the outlook for interest rates in Australia and the US. Stronger than expected Australian inflation has fuelled expectations that the RBA could raise rates again, with Westpac now forecasting a potential November hike. Higher Australian yields can make the currency more attractive to global investors.
The euro has also been supported by expectations of further monetary tightening from the European Central Bank, which is widely expected to raise rates by 25 basis points this week.
For Australians, a stronger dollar improves purchasing power overseas and makes imported goods and foreign travel relatively cheaper. The currency’s rally comes against a more complicated global backdrop, with oil prices surging towards US$100 a barrel as Middle East tensions escalate.
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