Australian Dollar Hits Multi-Year High: Is Now the Right Time to Book Your Overseas Trip?

In a year marked by unexpected global events, the Australian dollar (AUD) has quietly emerged as a standout performer. Despite turbulent international news, much of it negative, the AUD is proving resilient, reaching impressive milestones across major currencies.

Recent developments show the Aussie at its strongest against the US dollar in almost two years, hitting new highs versus the euro over the past 10 months, and approaching its strongest levels against the Japanese yen in decades.

Ray Attrill, Head of Foreign Exchange Strategy at National Australia Bank, confirms: “So far this year, there’s nothing not to like about the Australian currency.” The AUD has outperformed all other major currencies in 2026, showcasing robust strength and investor confidence.

For international travelers and online shoppers buying from foreign websites, this surge in the AUD offers a significant advantage, making overseas spending more affordable. But the pressing question remains: should you take advantage of this currency strength now or wait?

Will the “Make the Aussie Great Again” (MAGA) Trade Continue?

The current depreciation of other major currencies, particularly the US dollar, has made the AUD increasingly attractive. Joseph Capurso, Head of Foreign Currency and International Economics at Commonwealth Bank, notes, “There has been a stark shift in US government policy under President Trump, affecting currency markets globally.”

This shift, coupled with rising precious metal prices, has contributed to the Australian dollar’s rise following a significant decline in the US dollar last year. But it’s not just the falling greenback driving this momentum. According to Capurso, Australia’s relatively high interest rates, stable commodity prices, and a robust Global Economy have all played crucial roles.

Currently, the AUD trades above US$0.70 – its highest since February 2023, according to Bloomberg. Capurso predicts it will maintain this level for a few months before potentially declining to the low 60s by year-end, providing guidance for those planning US-bound travel or online purchases.

Attrill adds that although the exchange rate has risen quickly, any minor declines may only be temporary. “I expect renewed strength through the remainder of the quarter and the first half of the year. The Aussie is likely to trade with a seven in front of it again,” he says.

The Japanese Yen: How High Can the Aussie Go?

japan welcomed a record 42.7 million visitors in 2025, including nearly one million Australians. The country’s popularity as a vacation destination has been fueled by a historically cheap yen. However, over the past six months, the AUD has surged against the Japanese currency, making travel costs higher than in previous years.

Capurso recalls that last year, half his team traveled to Japan, highlighting how strong the AUD has become. On Tuesday afternoon, one Australian dollar bought 106.8 yen, peaking at 109 yen last Friday – a level surpassed only once in the past 35 years.

Attrill explains that high Australian interest rates, potential rate hikes, and the Bank of Japan’s ultra-low policy rates (0.75%) contribute to the AUD’s strength. With Japan facing rising inflation, the yen’s value is expected to remain relatively weak, suggesting no urgent rush for travelers heading to Japan in 2026.

The Euro: Steady Gains for the Aussie

While most discussions focus on the US dollar and yen, the AUD has also appreciated versus the euro. Currently, one AUD equals 58.2 euro cents – the highest since March of last year, marking a 2.5% gain in 2026.

Attrill points out that Australia’s rising interest rates compared to the eurozone’s stagnant 2% policy rate are driving this trend. “If European rates decline while Australia continues to increase rates, the AUD is poised to climb above 60 euro cents,” he notes.

Capurso concurs, forecasting the AUD could strengthen to around 61 euro cents in the coming months, levels last seen in late 2024. He advises travelers planning a European trip to secure airline tickets by mid-year to capitalize on favorable exchange rates.

In summary, the Australian dollar is currently enjoying exceptional strength against major global currencies. For travelers and international shoppers, this could be an ideal time to make overseas plans, although monitoring market trends and expert forecasts remains essential.