The currency, know as the Aussie, extended its six-day gain as Federal Reserve Chairman Ben S. Bernanke signaled the U.S. central bank is prepared to lower its 3 percent interest rate to shore up a faltering economy. Australia's dollar was buoyed as investors bought the nation's higher-yielding assets in anticipation of the central bank raising its 7 percent benchmark rate again next week to slow inflation.
The Australian dollar touched 94.34 U.S. cents, the most since March 1984, before trading at 94.11 cents at 9:19 a.m. in Sydney, from 93.81 cents in late Asian trading yesterday. The currency also climbed to its highest since August 1997 against the pound, reaching 47.59 pence.
Gains in the Australian dollar may be limited as a technical indicator traders watch to predict price movements signaled the currency may pare its 19 percent 12-month advance.
Australia's dollar has surged 7.4 percent this year to be the best performing major currency as the RBA lifted rates this month to slow inflation and the Fed slashed its benchmark in January by 1.25 percentage points to stave off a recession.