Exchange Rates Explained: How Currency Exchange Works in Australia

An exchange rate is the value of one currency compared to another. For example, if 1 AUD = 0.65 USD, that means one Australian dollar can be exchanged for 65 US cents.

Exchange rates move up and down every day based on global economic and political factors, supply and demand, and even market sentiment. These fluctuations are what make the foreign exchange (FX) market so dynamic.

Want to see the latest figures? Check today’s exchange rates in Australia or use our currency converter tool to find out exactly how much your money is worth right now.

Exchange rates change constantly because currencies are traded on global financial markets.

Factors that influence these rates include:

• Economic performance: Growth, inflation, and employment all affect how strong a country’s currency is.
• Interest rates: Higher rates often attract investors, increasing demand for that currency.
• Political stability: Investors prefer stable economies, so uncertainty can weaken a currency.
• Market sentiment: Even speculation can shift rates up or down.

If you’d like to track how rates are moving, check out our Travel Rate Tracker for real-time updates on when it’s the best time to buy your foreign currency.

There isn’t just one single “exchange rate.” The rate you see on the news — known as the interbank rate or spot rate — is the wholesale rate banks and large financial institutions use when exchanging massive amounts of currency.

When you exchange money as a consumer, you’ll see a retail rate, which includes small differences known as the spread — this covers operational costs and allows providers to offer convenient currency services to travellers.

For the most accurate rates available to you, check our online foreign exchange rates, which are updated daily.

When you buy foreign currency with Travelex online, you’ll enjoy $0 commission and access to our most competitive rates — available exclusively through our website or app.

You can order foreign cash or load your money directly onto a Travelex Money Card, then collect from your nearest store or airport.

💡 Tip: Our online rate is usually better than standard airport exchange rates, so ordering ahead can help you lock in the best deal.

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