But currency is only one part of the price tag, and the exchange rate is just one of several things worth weighing up before you commit. In this post we’ll walk through what a stronger dollar actually means for imported equipment, what’s been driving the recent movement, and the other costs that can sit alongside it, so you’ve got a clearer picture when you’re working through the numbers.
A quick note before we get into it: everything here is general in nature and isn’t financial advice. Currency markets move for all sorts of reasons and nobody can tell you exactly where the dollar will land. Think of this as background to help you ask better questions, not a signal to buy.
What we mean by a stronger Aussie dollar
If you’ve ever glanced at the AUD/USD figure on the news and skimmed past it, no judgement – it can just look like a bunch of numbers with green/red arrows. However, here’s how those numbers could impact your equipment imports.
The AUD/USD is simply how many US cents you get for one Australian dollar. When that number goes up, our dollar is “stronger”, meaning it buys more overseas. When it goes down, it’s ‘weaker’ and buys less.
So where’s it been sitting? According to KPMG’s Australia Economic Outlook for the June quarter of 2026, the dollar climbed from around US$0.68 in January to a peak of roughly US$0.72 in May, before easing back to about US$0.70 by late June. Not a dramatic swing, but a noticeable lift over the first half of the year.
There’s also a second measure worth knowing about, because the US dollar isn’t the only currency in play when you’re importing. It’s called the trade-weighted index, or TWI. Rather than comparing the Aussie against just one currency, the TWI measures it against a basket of the currencies we trade with most. Over the same period, the report notes the TWI rose from 63 points in January to 67 in May, then settled back to around 66 in June.
Why does that matter to you? Because depending on where your equipment is coming from, the relevant exchange rate might not be the US dollar at all. The TWI gives you a broader sense of how far the Aussie is stretching across our trading partners, not just against one of them.
Why has the dollar been stronger?
Currencies move for a whole range of reasons, and this movement is rarely down to just one thing. KPMG’s report points to a couple of main drivers behind the Aussie’s lift over the first half of 2026.
The big driver is interest rates. When Australia’s interest rates are relatively high compared to other countries, our assets become more attractive to overseas investors chasing a better return. To buy into those assets, they need Aussie dollars, and that extra demand helps push the currency up. The report notes this has been the primary force behind the appreciation, with higher domestic rates drawing capital into Australian assets.
The second factor is commodity demand. Australia exports a lot of raw materials, and steady demand for them has given the dollar some added support, helping keep it elevated even with plenty of global uncertainty in the background.
Worth keeping in mind: this is the reported explanation for what’s happened, not a promise of what happens next. The same forces that lift a currency can shift or reverse. If interest rates change or commodity demand softens, the picture can look different fairly quickly. That’s just the nature of exchange rates, which is part of why it’s tricky to time a purchase around them.
What a stronger dollar can mean for imported equipment
Here’s where it gets practical. When the Aussie dollar is stronger, goods priced in a foreign currency can effectively cost less once you convert the price back into Australian dollars. For equipment that’s made overseas, that’s the appeal.
The report gives a sense of this playing out. Import prices fell 1.2% over the March quarter, and KPMG attributes a good chunk of that to the stronger dollar, which made most capital goods and consumption goods cheaper across the board. Capital goods, in this context, are the bigger-ticket items businesses buy to actually run and grow, so think machinery, vehicles, and equipment rather than everyday consumables.
And it’s not just theory. Australian businesses have been leaning into imported gear. The report shows imports of capital goods rose 6.3% in the quarter, including record imports of computing equipment. A stronger dollar isn’t the only reason for that, but it does show firms have been willing to invest when the numbers stack up.
So if you’re eyeing a piece of imported kit, a firmer dollar can genuinely work in your favour on the sticker price. The key word there is “can”, because as we’ll get into next, the exchange rate is only one part of what you end up paying.
The catch: currency is only one part of the price
It would be neat if a stronger dollar meant everything imported got cheaper. But the exchange rate is only one lever, and other cost pressures can pull in the opposite direction at the same time.
This is reflected in the report. Even as the stronger dollar was pushing most import prices down, some imported inputs actually got more expensive. Fuels and fertilisers both rose over the quarter, driven by supply disruptions rather than currency. So depending on what you’re buying, a favourable exchange rate can be partly or fully offset by other things happening in the market.
For equipment specifically, this is worth sitting with for a second. The machine itself might be cheaper thanks to the dollar, but the broader cost of getting it here and running it, things like freight, fuel, and parts, can move independently. The report notes shipping costs stayed elevated through the first half of 2026, with container shipping rates still running well above pre-disruption levels.
The takeaway isn’t ‘don’t bother’. It’s that the headline exchange rate is a starting point, not the whole story. The real cost of an imported purchase depends on what it is, where it’s coming from, how it’s shipped, and what’s happening with the specific inputs tied to it. A strong dollar helps, but it’s worth looking past the sticker price to the full landed and running cost before you decide anything.
The other side of the ledger: financing costs
If you’re financing an imported purchase rather than paying cash, there’s a second number that matters just as much as the exchange rate: the cost of the finance itself.
Here’s the picture the report paints. The Reserve Bank held the cash rate at 4.35% at its June meeting, but it had already lifted rates three times earlier in 2026, and KPMG sees the probability of a further increase as very high. Borrowing costs have tightened noticeably as a result. In plain terms, the cash rate is the RBA’s main lever for the economy, and when it moves, the rates lenders charge tend to follow.
Why does this matter for an imported equipment decision? Because the exchange rate affects the price of the machine, while interest rates affect the cost of paying for it over time. They’re two separate things, and they don’t always move in the same direction. You could be looking at a cheaper imported price thanks to a firmer dollar, while the cost of financing that same purchase is edging up.
That’s not a reason for or against buying. It’s just a reminder that the sticker price and the finance cost are both part of the equation, and it’s worth weighing them together rather than focusing on one and forgetting the other. This is exactly the kind of thing a broker can help you map out, so the currency saving on the price doesn’t get quietly eaten up somewhere else.
Things to think through before you buy
None of this points to a single right answer, because the right answer depends on your business. But if a stronger dollar has you weighing up an imported purchase, here are a few general things worth thinking through:
- Is the price quoted in Aussie dollars or a foreign currency? If your supplier has already locked in an AUD price, the exchange rate movement may not flow through to you at all. If it’s in a foreign currency, timing and currency swings matter more.
- When do you actually pay versus when it’s delivered? A favourable rate today doesn’t help much if payment falls due months down the track and the dollar has moved by then.
- What do your finance costs look like right now? The price of the equipment and the cost of funding it are separate questions, and both deserve a look.
- Does the purchase make sense regardless of the dollar? If the equipment genuinely helps the business, that case should hold up on its own. If it only stacks up because of a short-term currency move, that’s worth a second thought.
The bottom line
A stronger Aussie dollar can be a real tailwind if you’re buying imported equipment, because goods priced overseas can effectively cost less once converted back home. The report backs that up, with import prices easing over the March quarter on the back of a firmer dollar.
But it’s one moving part among several. Other costs like fuel, fertiliser, and shipping can push the other way, forecasts are estimates rather than promises, and the cost of financing the purchase sits alongside the price you pay for it. A strong dollar helps, but it’s not the whole story, and it can change.
The most useful thing you can do is look at the full picture for your own situation, price, timing, running costs, and finance together, and have a chat with your broker about how to structure things. That way, if the currency is working in your favour, you’re set up to actually make the most of it.
This article is general in nature and does not constitute financial advice. It does not take into account your objectives, financial situation, or needs. Figures are drawn from the KPMG Australia Economic Outlook Q2 2026 (July 2026). Currency and economic conditions can change, and past or forecast movements are not a reliable indicator of future outcomes. Consider seeking advice tailored to your circumstances before making a decision.
