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The Australian dollar has muscled its way back above 70 US cents, putting the 71–72 cent zone firmly in sight as a softer greenback and a useful interest-rate gap give the local currency fresh support.

On 12 August, the Aussie was trading near US$0.706. That extends a recovery that gathered pace through July. The move owes less to any sudden burst of Australian economic brilliance than to a US dollar that has lost some of its swagger. In foreign exchange, one currency’s bad day can be another’s upgrade.

The domestic backdrop is also helping. The Reserve Bank of Australia held the cash rate at 4.35 per cent on 11 August. Governor Michele Bullock also made clear that another rise remains possible if inflation stays too strong. The US Federal Reserve, by contrast, kept its federal funds target range at 3.50–3.75 per cent in late July.

That gap matters. Higher Australian rates can make Australian-dollar assets more attractive to global investors, particularly when the US dollar is losing momentum.

OFX Director Luke Czirok said the recent recovery was largely driven by offshore activity.

“The Australian dollar has done well to claw its way back towards 70 US cents, and it’s largely a story about what the US dollar is doing rather than what we’re doing at home,” said OFX Director Luke Czirok. “If US data continues to disappoint and the Fed stays cautious under its new chair, we could see the Aussie dollar test the US 0.71-0.72 cent range.”

The quotation has been retained exactly as published in the OFX-supplied material.

US weakness gives the Aussie room to run

The case for further gains has strengthened. US non-farm payrolls fell by 23,000 in July, a weak result that raised fresh questions about the strength of the American labour market. Federal Reserve Chair Kevin Warsh and his colleagues held rates steady in July, leaving markets to watch closely the next run of inflation and jobs data.

For Australian travel businesses, this is more than a chart on a dealer’s screen.

Luke Czirok – OFX

A stronger Australian dollar can cut the local-currency cost of US-dollar hotel contracts, cruise inventory, aviation services and offshore supplier payments. It can also stretch the spending power of Australians travelling to destinations where prices are set in US dollars or where local currencies closely track the US dollar.

In an industry where margins occasionally have the generosity of an airline economy seat, every extra fraction of a cent is welcome.

That does not mean the Aussie has a clear runway. China remains a major influence due to Australia’s trade and commodity ties. Oil prices and Middle East tensions also matter. A fresh jump in global risk could lift demand for the US dollar, while stronger-than-expected American inflation could put the greenback back on the front foot.

US inflation could decide the next move

The next big test arrives within hours.

US July consumer inflation figures are due at 8.30 am Eastern Time on 12 August — 10.30 pm AEST. A soft reading could reinforce expectations that US monetary policy will remain restrained. A hotter number could quickly revive the dollar and make the Aussie’s climb rather steeper.

Then comes Jackson Hole.

The Federal Reserve Bank of Kansas City will host its annual Economic Policy Symposium from 27–29 August 2026. This year’s theme is “Financial Innovation: Implications for Payments and Policy.” Traders will be listening closely for any shift in tone from the world’s central bankers. Currency markets, after all, can turn one stray sentence into a full day’s entertainment.

Pound and euro join the dollar dance

Sterling has also benefited from the softer US dollar, trading around the mid-US$1.30s.

The Bank of England left the Bank Rate at 3.75 per cent in July, but three of its nine policymakers voted for a quarter-point increase. That 6–3 decision shows inflation remains very much alive in Britain, despite continuing concern about economic growth.

The euro has meanwhile traded above US$1.15. Euro-area inflation stood at 2.9 per cent in July, while the European Central Bank kept its three key interest rates unchanged at its 23 July meeting. Importantly, the ECB remains data-dependent, so September may prove significant without making a rate increase a foregone conclusion.

That distinction matters. Currency markets have a habit of treating expectations as facts right up until a central banker spoils the party.

OFX tips Aussie range as high as US$0.72

OFX’s published August forecast places AUD/USD between 0.6900 and 0.7200.

Its other expected ranges are GBP/USD at 1.3270–1.3655, EUR/USD at 1.1440–1.1700 and NZD/USD at 0.5750–0.6000. OFX also lists USD/JPY at 152.00–162.00, CAD/USD at 0.7100–0.7250, USD/SGD at 1.2700–1.2900 and USD/HKD at 7.8350–7.8480.

The immediate question, therefore, is no longer whether the Aussie can reclaim 70 US cents.

It already has.

The more interesting contest is whether it can hold that ground and build towards 71 or 72 cents without the US dollar suddenly finding its second wind.

For travel sellers, wholesalers, tourism operators, and businesses incurring offshore costs, August is worth watching closely. Exchange rates rarely ring a bell before they turn.

For now, however, the Australian dollar is giving the travel industry something it will gladly take: a little more overseas buying power and a little less pain at the payment screen.