Why the Aussie dollar is soaring in value - and why it's good news for those ... trends now
To anyone planning a trip to the US in the coming months, the sudden and substantial increase in the Australian dollar will come as welcome news.
Against the US dollar, our currency has added nearly 5 per cent over November, the biggest monthly gain in 2023, to buy about US66.20c.
On Tuesday, the Australian dollar reached its highest level since late July, briefly hitting US67c in offshore trading before easing lower.
Although local factors play a role in the Australian currency's recent appreciation, the primary reason for the jump in the dollar can be attributed to the slide in the greenback rather than domestic conditions.
Indeed, measuring the US dollar relative to a basket of foreign currencies, weighted by trading partnership, the greenback has experienced a decline of more than 3 per cent this month and is sitting at three-month lows.
A higher Aussie dollar means travelers will see their money go further overseas
The Australian dollar saw its biggest monthly increase against the greenback in 2023 in November
This measure, known as the DXY, dropped half a per cent on Tuesday when Federal Reserve governor Christopher Waller added his voice to the growing number of policy makers who appear increasingly comfortable with the path taken by the Fed.
The US has made strong progress on taming price pressures. While the US inflation rate peaked at 9.1 per cent in June last year, it has fallen to just 3.2 per cent in October and appears on track to hit Fed's target of 2 per cent.
Mr Waller, who has firmly been at the 'hawkish' end of the spectrum on the Fed's board - meaning he regularly voted to increase interest rates - said there would be no point of further rate hikes if prices continued to retreat.
'I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2 per cent,' Mr Waller said.
'I am encouraged by what we have learned in the past few weeks - something appears to be giving, and