The value of the Australian dollar is high right now. So should you book that overseas trip?
In a year of extraordinary global news, and more of it bad than good, it may be surprising that the Australian dollar is proving a world beater,The Aussie has hit some impressive milestones of late: the strongest against the US dollar in nearly two years, the highest against the euro in 10 months, and approaching the strongest in decades against the yen,Ray Attrill, the head of foreign exchange strategy at National Australia Bank, says the Aussie has outperformed every other major currency in 2026,“So far this year it has been a case of there’s nothing not to like about the Australian currency,” Attrill says,It’s been good news for overseas travellers and shoppers looking to buy from overseas websites.
But can it last? And do you need to rush to book that overseas holiday now, or should you wait? Hold off on that purchase, or add it to the cart?Our dollar’s appeal is magnified by the weakness in other currencies – right now, it’s the US dollar.“There’s definitely been a stark shift in the way the US government behaves on the world stage under President Trump,” Joseph Capurso, the head of foreign exchange and international economics at Commonwealth Bank, says.“One impact of that is you’ve seen precious metal prices go up.You’ve seen the US dollar fall quite heavily last year, and the Aussie dollar has been lifting in response to that weaker US dollar.”But it’s not just the falling greenback that has helped push the Aussie to US69.
2 cents, the highest price since February 2023, according to Bloomberg.Our relatively high interest rates, a strong global economy, and solid commodity prices have all played a part, Capurso says.He says those looking to buy from an US-based website or planning a trip have a window of a few months where the Australian dollar will peak at about US70 cents, before a decline towards the low 60s by the end of the year.Attrill says the exchange rate has come a long way in a short period of time, and that he wouldn’t be surprised to see it pull back a little.“But I suspect that will be probably just a prelude, probably to renewed strength as we go through the rest of the quarter or the first half of the year, so [I’m] certainly pretty confident that we will see Aussie trading with a seven in front of it.
“I’d say it’s time to book a holiday now to the US, but I’m not sure that it’s such an appealing prospect.”Japan hosted a record 42.7 million tourists in 2025 – including nearly 1 million Australians – an influx that has reportedly pushed even the famed hospitality of the Japanese to its limits.The cheap yen has played a big role in its peak popularity as a holiday destination“The Australian dollar against the Japanese yen has been extremely high in the past six or so months.Half my team went to Japan for holidays last year,” Capurso says.
Even describing it as “extremely high” may be underplaying it.The Aussie on Tuesday afternoon bought 106.8 yen, but reached as high as 109 yen last Friday, a level which has only been topped once in the past 35 years.As far as the currency goes, for those hoping in 2026 to holiday in Japan, there’s no need to rush.Even if the Japanese and American governments intervene to reverse some of the recent slide in the yen, that will prove short-lived, experts say.
Attrill says relatively high interest rates in Australia – with the prospect of higher to come – have underpinned our currency’s strength,The reverse is true in Japan, where the Bank of Japan’s policy rate is just 0,75% – with no signs of rate hikes – despite inflation surging to 3% in a country more used to falling than rising prices,“In Japan you’ve got deeply negative real policy rates, whereas everybody else has either still got positive real interest rates, or they’re close to neutral,” Attrill says,While the talk among currency watchers has been all about the greenback and the yen, the Aussie has also lifted against the euro, if less dramatically.
Our dollar is buying 58.2 euro cents, up 2.5% in 2026 and the strongest since March last year.“For the Aussie against the euro, you’ve got a significant and likely rising interest rate differential,” Attrill explains, adding that he thinks the dollar will push above 60 euro cents.“The eurozone’s at 2% [policy rate] basically, and going nowhere.
And if it does anything, it will probably go down this year.And in Australia, if rates are going anywhere, they are going up.”Capurso agrees our currency should continue to strengthen against its European counterpart over coming months to about 61 euro cents – levels last seen in late 2024.“So I think you want to book your plane tickets for Italy for the middle of the year, and then when you’re over there, you’ll get a good exchange rate,” he says.
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