Why the price of a Big Mac tells us the Australian dollar is undervalued - and most economists agree

While economists parse every Reserve Bank of Australia murmur on what it implies for interest rates, there's another variable many of us will be eyeing just as closely now global borders are finally opening up: the Australian dollar.

And oddly enough, the central bank is not a very helpful guide at all, and nor, it turns out, is the government, when it comes to the exchange rate.

Here's where analysts think the Australian dollar is headed, and why those outward bound may have additional reasons for cheer.

As of mid-Friday afternoon AEDT, the Australian dollar was buying 71.4 US cents, a rise of about 2% over the past week.

The trade-weighted index, based on the composition of Australia's merchandise goods and services trade, was sitting at 60.1 as of Friday's close. (China's yuan is about a third of the weight.)

These are good markers because those two rates - 71 US cents and a TWI of 60 - also happen to match the assumed values used by the quarterly RBA's Statement on Monetary Policy released by the central bank on Friday.

Key RBA forecasts - such as GDP growth accelerating from 4.75% in 2021 to 5.5% in 2022 before slowing to a 2.5% clip in 2023 - are based in part on those exchange rates. The previous statement, in November, assumed 74 US cents and a TWI at 62.