The appreciation of the US dollar was not associated with any noticeable change in interest rate expectations in the US, and, in the case of the AUD/USD exchange rate, there was no material change in Australian interest rate expectations either. While the US dollar has appreciated, on a trade-weighted basis it is still not that far above its all-time lows reached in 2011.
It has only appreciated by 4 per cent in the past few months, which is a small move in the history of swings in foreign exchange rates, where movements of up to 40 per cent have occurred. Similarly, while the euro has depreciated in recent months, on a trade-weighted basis the euro is not particularly low.