Beyond making overseas travel more expensive, a weaker Aussie dollar can impact any part of the Australian economy dependent on imports — from electronics, clothes and petrol to groceries.

In late September one Australian dollar was worth 69.4 US cents.

On the flipside, Australian exporters generally enjoy a weaker dollar as this can make prices more competitive to international buyers.

A number of elements have contributed to the weakening of the Australian dollar.

Why has the Australian dollar dropped so much?

“Secondly, concerns are growing that China’s economic stimulus efforts may not be effective, weakening the Chinese yuan and consequently impacting the Australian dollar.

“The Australian dollar is often viewed as a bit of a proxy for the Chinese economy due to our exports.”

How does a weak dollar affect the cost of living?

However, other items can also increase in cost, he said.

“So a falling dollar will hurt the cost of living of households that consume a high level of imports, but it won’t have an impact on things like fees and charges, rent and childcare.”

Is now a good time to exchange currency?

“However, if you’re not travelling soon, it might be wise to wait and see how the dollar performs.”

What is the prediction for the Australian dollar?

“While the dollar has weakened, the situation remains relatively stable, but there’s a risk of further decline.”