Aussie Dollar Surges to Multi-Year Highs

The Australian dollar has surged to multi-year highs, averaging around US$0.64 last year but now climbing above US$0.71, with a high of US$0.719 on August 29.

This surge is attributed to rising interest rates and hotter-than-expected inflation figures on August 26, which showed annual inflation at 3.5%.

Compare the Market's Chris Ford notes that this means one Australian dollar can now purchase more foreign currency than it did a year ago, making it easier for Australians spending money internationally.

Australians with expenses overseas, such as travellers and those supporting family members living abroad, are among the biggest winners of the strong Aussie dollar.

Here are five ways to take advantage of the stronger Australian dollar:

1. Make your overseas holiday money go further: Travellers can now purchase more foreign currency with each Australian dollar.

2. Think ahead on future travel: Converting some spending money before departure can be a good idea, as exchange rates can move quickly in either direction.

3. Shop overseas: A stronger dollar can make goods purchased from international retailers cheaper in Australian dollar terms, but Australians should be wary of foreign transaction fees and choose the best option for their needs.

4. Look at investment overseas: The strong Aussie dollar makes international investments, such as shares, cheaper for Australians because each dollar buys more foreign currency.

5. Send money to children or family overseas: A higher dollar means local money goes much further when sending support to loved ones living abroad.