By 2013, however, the US economy was gaining steam and the dollar was beginning to regain some of its lost value. Australia’s growth had begun to slow in 2011 and it was now evident that the Australian economy was cooling. Analysts cited the slow-down in mining and commodities investments, lower consumer spending, and weakening labor markets as major contributors to the decline in growth and the lowered outlook for Australia. The economy of the US, meanwhile, continued to improve. In 2014 it began to surge ahead, as consumer confidence increased and the employment rate ticked up. This was reflected in the stronger US dollar, as the conversion rate had flipped back in favor of the USD, with the currency exchange rate by the beginning of 2014 now at AUD:USD US$0.8861.
In the first quarter of 2015, the Reserve Bank of Australia announced that it would hold interest rates steady. While this should keep the Australian dollar’s value steady in the near-term, the long-term outlook for the AUD has turned slightly pessimistic, with forecasts pointing to an overall weakening of the AUD against the world’s major currencies.
The US dollar is heading in the opposite direction for the next several years, analysts predict. Most see an improving US economy that will gain steam in the coming years. The US dollar’s value is expected to continue climbing against most of the world’s currencies, including the AUD.