The Dollar Is Up 11%: What That Does to Import Prices

The Australian dollar is worth about US$0.71 today. Twelve months ago it was sitting around US$0.64. That is an 11% gain, and it changes the maths on anything you buy that was manufactured overseas.

What is driving the move

Three things. The RBA has been raising rates while the US Federal Reserve is expected to cut, which makes Australian assets more attractive to global investors. The US dollar itself has weakened roughly 10% since early 2025, pulling most currencies up against it. And strong demand for Australian commodities, particularly metals linked to AI infrastructure and electrification, has kept the floor firm. Most forecasters expect the dollar to sit in the US$0.70 to US$0.75 range through the rest of 2026.

How exchange rates reach your price tag

When the Australian dollar strengthens, imported goods get cheaper in wholesale terms. A piece of equipment priced at US$100,000 cost roughly AUD $156,000 when the dollar was at US$0.64. At today's rate, the same item costs about AUD $140,000. That is $16,000 less for the same product.

But here is the part most buyers miss: that saving does not automatically show up on your quote.

Most Australian distributors and dealers set pricing based on the exchange rate at the time of their last shipment or price review. If your supplier last updated their price list when the dollar was at 65 or 66 cents, the current price still reflects the old rate. The distributor's margin has widened. The sticker price has not moved.

This applies across categories. Vehicles, medical devices, IT hardware, commercial fit-out materials, manufacturing components. Anything sourced in US dollars, euros, or yen. The stronger the dollar gets, the bigger the gap between the distributor's landed cost and the price sitting on the shelf.

For businesses that import directly

If you buy direct from overseas suppliers, the gain is more visible. Your invoices arrive in foreign currency, so you see the rate every time you pay. But timing still matters. The dollar can move 2 to 3 cents in a week. If you placed an order at US$0.72 and pay the invoice three weeks later at US$0.71, the rate moved against you. The gain over 12 months is real, but it is not a straight line.

The ABS Import Price Index for the March quarter confirms the broader trend. Import prices fell 0.3% through the year, even as some underlying commodity prices rose. The currency did enough lifting to offset price increases in the goods themselves.

What to do with this information

If you are quoting a piece of equipment or a vehicle right now, ask one question: when was this price last set? If the answer is late 2025 or early 2026, there is a reasonable chance the FX savings have not been passed through. That does not mean the supplier will drop the price on the spot. But it opens a conversation most buyers are not having, and it signals that you understand how the number was built.

If you import directly and your invoices land in USD, EUR, or JPY, look at whether a forward contract makes sense for your situation. A forward contract lets you lock in today's exchange rate for a payment due in 8 or 12 weeks, so you know the AUD cost before the goods arrive. Most banks and FX brokers offer them for transactions above $10,000. It is not speculation. It is removing a variable from your cash flow.

And if you are comparing prices across suppliers, keep the FX context in mind. Two quotes that look similar could reflect very different underlying rates, depending on when each supplier last repriced. The headline number is not the whole picture.

This article is general information only and is not financial advice.