Sydney, Australia – October 6, 2026 – What could be in Australia this week, business-wise, turns out to be less than favourable by the time the money reaches the business partner. The reason for these issues is not necessarily the product, customers, or agreements. The only factor that can play its role in this situation is Australian currency, according to many professionals in this area.
This currency has shown how quickly such a risk can appear. The Reserve Bank of Australia (RBA) has stated that the Australian dollar was 0.6933 US dollars as of October 2, 2026, and 0.6977 US dollars as of September 30. On October 6, it was reported that the dollar had returned to 0.6970 US dollars, according to the latest updates from the RBA.
The changes may seem unimportant when looking at the currency exchange board, but they can lead to thousands of Australian dollars lost or gained by the company that makes countless international payments.
Let’s consider an invoice of US$100,000 for illustration. The exchange rate of US$0.70 per Australian dollar means that the transfer of money costs approximately A$142,857. If the exchange rate is US$0.65, the transfer will soon rise to A$153,846—almost A$11,000 more than required, ignoring freight and other related costs.
This acts as a classic example of the dilemma related to foreign exchange: the transaction cost remains unchanged, but the rate of conversion alters the real cost in terms of Australian dollars.
Who suffers from foreign exchange rates first? Well, it’s normally the importer who suffers in the first place.
Whenever an Australian retailer buys goods from abroad, or when a company pays for machinery or digital products in US dollars, it faces this very risk. What is even more important is that the supplier in this case might be in Asia.
According to the Reserve Bank of Australia, changes in exchange rates impact domestic prices as imported goods and services turn relatively pricey when the Australian dollar depreciates. However, this impact may not be recognised immediately, as companies can absorb expenses, deplete their stocks, or postpone increasing prices.
This delay may lead to another kind of challenge: the company might have already quoted the customer an invoice, thus locking in Australian dollar prices before incurring higher import costs.
Nonetheless, the depreciation of the national currency has its other effect.
For example, an Australian exporter receiving US$100,000 will have A$153,846 in the bank at the exchange rate of US$0.65, while the exchange rate of US$0.70 would give him A$142,857, excluding transaction fees.
This could mean more income in Australian dollars for exporters who incur most of their costs in Australia. An Australian currency that loses value could also make Australian goods and services cheaper in the world market, increasing their competitiveness. The Reserve Bank of Australia views the depreciation of the Australian dollar as one of the most important economic channels through which exchange-rate depreciation works.
But the advantage could sometimes prove illusory. An exporter whose production requires machinery, software or parts imported from abroad may run into increased costs at the same time. More Australian dollars for the US dollar does not necessarily mean more profits.
Higher interest rates do not necessarily help achieve a stronger dollar either.
Australia’s exchange rates are a product of external factors that are beyond the powers of the RBA’s board members.
The Reserve Bank of Australia has decided to raise the cash-rate target by 25 basis points to 4.60% on September 29, 2026, claiming that the reasons were high inflation rates, increasing energy prices across the world, domestic capacity constraints, and price hikes experienced by the local businesses.
However, it’s worth noting that even though Australian interest rates go up, there is no guarantee that the Australian dollar will rise too. According to the Reserve Bank, the relative interest rates, commodity prices, and global investors’ willingness to take risks are all factors that impact the Australian dollar.
This explains the fact that the Australian dollar may fall even if the Australian monetary policy is tightening.
For companies, the lesson is both unpleasant and simple: the exchange rate is not only a figure from the financial market; it is a moving expense included in real business decisions. The quote, purchase order, or export arrangement can be frozen for weeks or months, but the currency which will fulfil that obligation does not stay the same.
Thus, the organisations that are the most affected may not be the ones paying attention to the dollar but the ones that do not care to ask the much bigger question: how much will this deal cost by the time the payment is made?
