The Australian dollar has surged to its highest point in 15 months, and experts suggest it might continue to climb, driven by a combination of local economic data and global factors.

During the Australia Day long weekend, the currency settled between 68.5 and 69 US cents, marking a 2.3% increase over the week leading up to Friday.

According to Tony Sycamore from IG Markets, the Australian dollar has outshone other currencies, benefiting from a dip in the US dollar’s strength.

“The primary catalyst has been the strong labor force data from December,” Sycamore informed SBS News.

Recent data from the Australian Bureau of Statistics indicated that unemployment had decreased to 4.1% from 4.3% in November.

Sycamore also noted that rising tensions between the European Union and the United States, coupled with climbing precious metal prices, have provided “very solid support” for the Australian dollar’s performance.

“[Reaching 70 US cents] is certainly possible in the weeks ahead if the current momentum holds,” he said.

Geopolitical uncertainties, such as the threat of a US/EU trade war, have also played a part in the fluctuating values of currencies.

“The events of this week are in line with the Trump administration’s unpredictable style, which is going to keep markets on their toes in 2026,” he said.

Effect on travel, cost of living

If you’re planning on travelling overseas anytime soon, you might benefit from that value jump — or lose out — depending on where you’re flying to.

However, the change in value may not make a significant difference in how far your dollar stretches in a foreign currency, according to Graeme Hughes a consumer expert from Griffith University.

“It might be worth considering exchanging some currency now to lock in a better rate,” Hughes said.

“However, if you’re not travelling soon, it might be wise to wait and see how the dollar performs.”

The Australian dollar has been rising in the past few days when compared to the US dollar, Euro and Yen, although the gains are slight.

Besides travel, a stronger dollar makes imports to Australia less expensive, which can reduce prices for commodities like petrol, because its pricing is dependent on global markets.

A stronger Australian dollar may mean cheaper petrol. Source: AAP

Other items Australia imports, from the US for example, would also become cheaper.

Hughes said predicting currency movements is “tricky business”, but there are indicators to look out for.

“Decisions made by the Reserve Bank of Australia, the performance of the global economy, and the strength of the US dollar will all play a role.”

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