THE Australian dollar cracked US93c on Wednesday, hitting a 23-year high as a widely anticipated US interest rate cut triggered a resurgence of confidence in growth asset markets.
In a sign of renewed risk appetite in foreign-exchange markets, the Australian dollar also hit a 16-year high against the lower-yielding Japanese yen.
The currency is expected to build a support base around its current level as it awaits a widely expected Australian rate rise next week.
At 4.45pm Sydney time, the Australian dollar was quoted at US93.12c, up from US92.17c late on Wednesday, but below an intraday high of US93.42c.
The Australian dollar is at the highest it has been since April 1984.
Against the Japanese yen, the Australian dollar was at Y107.29, up from Y105.71, and hit a high of Y107.85 during the session.
The flight of funds to assets like the Australian dollar and equity markets and expectations of a Reserve Bank of Australia 25-basis-point interest rate rise next week weighed on the Australian bond market.
December three-year futures were down 11.5 ticks at 93.235, while 10-year futures were down 12.5 ticks at 93.69.
The yield on three-year government bonds climbed to a new seven-year high of 6.83 per cent.
Grange Securities chief economist Stephen Roberts said there was now little domestic
information to drive the Australian dollar until the RBA's interest rate decision next week.
"It's going to be more difficult going for the Australian dollar," Mr Roberts said.
"We haven't got any more data this week to help us and then we're into the Reserve Bank's meeting next week, which is already fairly factored in.
"It will probably do a bit of consolidating at this level if it's going to push any higher."
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