After hitting 106 US cents yesterday, the rampant Aussie dollar today breezed past 107 US cents and is a chance to reach 108 US cents this afternoon.
At 6am, the Aussie was hovering around the 106.9-US-cent mark after hitting 106.94 US cents against its US counterpart as stocks and commodities both rallied on demand for assets linked to growth.
The dollar pushed through 107.50 US cents to hit 107.72 US cents at about 12.25pm, according to Bloomberg data, after the latest production inflation figures came out higher than expected.
Market watchers were left considering whether the Aussie could touch 108 US cents later today, a level not seen since January 1982, almost two years before the dollar was floated.
ANZ bank currency analyst Grant Turley said markets didn’t foresee any threats to the unit’s upward progress over the weekend while there were still concerns over the health of the US economy.
“The US dollar weakening has been self-reinforcing,” said Mr Turley.
“We have a lot of Asian central banks intervening in their own local currency. That means selling the local currency and buying the US dollar. They don’t actually want to hold on to the US dollars,” he said.
Mr Turley said that those central banks had been selling the greenback to buy the Aussie, the British pound and the euro.
‘‘So it ends up being a circular process and in the meanwhile people are positive on the Australian outlook,” said Mr Turley.
Producer prices rose 1.2 per cent in the March quarter from the previous three months, compared with the 1 per cent pace expected. From a year earlier, prices were up 2.9 per cent versus the 2.7 per cent tipped by economists.
Record run
The latest high continues a record-breaking run for the unit as investors dump the greenback on worries about debt levels in the US.
Those concerns, though, did not stop money from flooding into stock markets with Wall Street and other major markets posting some of their best gains of the year overnight. The Australian sharemarket has followed suit, building on yesterday's 1.4 per cent gain, to advance about another 1 per cent in early trading.
