THE Australian dollar is on course to break above US90¢ after rising to its highest in more than a year as confidence grows that the global economy is strengthening.
Australia's currency followed share and commodity prices higher to peak at US87.76¢ yesterday, the strongest against the US dollar since August 22, 2008. Experts say little now stands between the currency and a run at US90¢.
"If it gets through US88¢, then it will probably be a case of 'US90¢ here we come'," said Westpac Banking Corp currency strategist Jonathan Cavenagh. "That is probably where we are going to gravitate to over the next few months."
The Australian Financial Review reports that concerns about the trillions of dollars borrowed by the Obama administration to fund stimulus measures are plaguing the greenback. The US's near-zero interest rate also makes the currency less appealing to traders, who would prefer to hold the $A, which benefits from the Reserve Bank of Australia's 3 per cent cash rate.
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