Key Highlights

  • At 4.00 pm on 13 October 2026, A$1 bought US$0.6961 and the TWI stood at 64.7.
  • That is slightly below the 65.3 TWI level the RBA’s August forecasts assumed from December 2026.
  • The September minutes described the dollar as about 5% higher on a trade-weighted basis than at the start of the year, but Bullock has said the exchange rate channel takes a while to feed through.

At 4.00 pm on 13 October 2026, one Australian dollar bought 0.6961 US dollars and the trade-weighted index stood at 64.7, two numbers that matter for the price of imported goods and, through them, for the inflation fight the RBA is waging.

The exchange rate is one of the less obvious channels through which the Reserve Bank of Australia's decisions, and global events, reach the prices Australians pay. Fuel, electronics, machinery and many everyday goods are bought from overseas, so the value of the Australian dollar helps determine what they cost once they land.

The RBA publishes daily exchange rate figures, quoted as units of foreign currency per A$1. On 13 October, those figures showed the dollar at US$0.6961, or just under 69.6 US cents, and the trade-weighted index (TWI) at 64.7. This article explains what those two readings mean and how they fit with the RBA's own assumptions and commentary.

Two ways to measure one currency

The US dollar rate is the figure most often quoted, partly because many globally traded commodities, including crude oil, are priced in US dollars. A rate of 0.6961 means A$1 buys about 69.6 US cents; put the other way, US$1 costs about A$1.44.

The TWI takes a broader view. Rather than measuring the Australian dollar against a single currency, it measures it against a basket of the currencies of Australia's trading partners, weighted by their importance in trade. A higher TWI means the dollar is stronger on average across that basket; a lower one means it is weaker.

The two measures can move differently. The Australian dollar can gain against one currency while losing ground against others, so the TWI offers a more rounded picture of how the currency is affecting the cost of imports as a whole.

How 64.7 compares with the RBA's assumptions

The RBA's August 2026 Statement on Monetary Policy (SMP), with forecasts finalised on 5 August and therefore before the September rate rise, included assumptions for the TWI: 66.1 in the June quarter of 2026, and 65.3 from December 2026 through to December 2028.

On 13 October, the TWI was 64.7. That is 0.6 points below the 65.3 assumed for December 2026, and 1.4 points below the June quarter figure. In simple terms, the Australian dollar was a little weaker on a trade-weighted basis than the level the forecasts assumed for later this year. All else equal, a weaker currency tends to raise the Australian-dollar cost of imported goods, although any such effect depends on many other factors and builds over time.

The longer-term trend tells a somewhat different story. In August, Assistant Governor (Financial Markets) Christopher Kent said the dollar was about 5% higher on a trade-weighted basis since the start of 2026. The minutes of the 28–29 September Monetary Policy Board meeting likewise said the dollar was about 5% higher since the start of the year on a trade-weighted basis, though it had depreciated slightly since the Board's previous meeting.

A channel that works slowly

How quickly do currency movements show up in prices? Governor Michele Bullock offered a short answer at her 29 September media conference: "The exchange rate channel takes a while to feed through."

That lag matters for interpreting any single day's figures. A move in the dollar does not instantly reprice the goods already on shelves or in transit. Importers may have contracts, hedging arrangements or existing stock, and they may choose to absorb some changes in their margins for a time. The effect on consumer prices, if any, tends to emerge gradually.

It also means currency movements interact with other global price pressures. The Board's statement noted upside risks from a broader Middle East conflict, higher global energy prices and AI-related demand pushing up technology goods prices (paraphrased). The minutes say domestic petrol and diesel prices were 13% higher than forecast in August. For goods such as fuel and technology products, what happens to world prices and what happens to the Australian dollar both feed into what consumers eventually pay.

The August SMP's oil assumptions give a sense of the global backdrop the forecasts were built on: Brent crude at US$94.9 a barrel in the June quarter of 2026, easing to US$81.2 by December 2026 and US$75.9 by June 2027. Because those prices are expressed in US dollars, the Australian dollar's value against the greenback helps determine how they translate locally.

Where the currency sits in the inflation picture

It is important not to overstate the currency's role. Headline CPI, which includes imported items such as fuel directly, was 4.0% over the year to August 2026, according to the monthly CPI. Underlying inflation, measured by the trimmed mean, was 3.6% over the year to the June quarter of 2026.

According to the minutes, RBA staff judged that the recent surprise in underlying inflation more likely reflected domestic capacity pressures than cost pass-through from the Middle East conflict. Bullock put it directly: "Inflation is too high and has been driven by domestic capacity pressures." Imported price pressures, including those influenced by the exchange rate, are part of the story, but on the RBA's assessment they are not the main driver of underlying inflation.

The Board raised the cash rate target by 25 basis points to 4.60% at that September meeting, and the RBA targets inflation of 2–3%, aiming for the 2.5% midpoint.

The bottom line

On 13 October, the Australian dollar was worth US$0.6961 and the TWI was 64.7, slightly below the 65.3 level the RBA's August forecasts assumed from December 2026. The September minutes described the dollar as about 5% higher on a trade-weighted basis than at the start of the year, but the Governor has cautioned that the exchange rate channel takes time to work.

For import prices, the currency is one input among several, alongside global energy prices and technology goods prices. For underlying inflation, the RBA's focus remains on domestic capacity pressures. The September CPI is scheduled for release on 28 October and the next cash rate decision is scheduled for 3 November.

The exchange-rate figures cited here are observations as at 13 October 2026 and should not be read as live quotations for 14 October.