Aussie tourists to win from stronger $A

The Australian dollar is being tipped to climb back up to 85 US cents, putting pressure on the RBA to cut interest rates.

If the resurgent Aussie dollar's anything to go by, now could be a good time for an overseas holiday.

The local currency leapt back over 80 US cents on Wednesday for the first time since January, buoyed by stronger iron ore prices and weak economic data out of the US.

For tourists heading overseas, the news could get even better, with speculation the dollar could reach 85 US cents.

"It's quite conceivable we could push up to ... around 84 or 85 (US cents) before the downswing resumes again," AMP Capital Investors chief economist Shane Oliver told AAP.

While tourists would be cheering a further lift, exporters would be less thrilled, Dr Oliver said.

A climbing dollar would also hit hard farmers, local tourist operators, miners, and higher education providers, he said.

"Basically companies that have international exposure," Dr Oliver added.

A further rise would also probably disappoint Reserve Bank governor Glenn Stevens, who has said he would like the dollar to be around 75 US cents to help fire up Australia's economy.

The dollar would be a "hot topic", Dr Oliver said, among Mr Stevens and his colleagues at the RBA's May 5 board meeting.

"I think it's a very strong argument for the Reserve to ease again," he said.

According to analysts, a key factor pushing the local currency higher was data showing US consumer confidence levels diving to their lowest levels so far in 2015.

They also pointed to higher iron ore prices, which in China have edged close to the $US60 a tonne mark.


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Source: AAP


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