Australia's currency headed for its biggest quarterly gain since the last three months of 2006 as the UBS Bloomberg Constant Maturity Commodity Index climbed to a record on June 27, taking the index's advance this year to 32 percent.
The Australian dollar traded at 96.21 U.S. cents at 1:25 p.m. in Sydney from 96.10 cents late in New York on June 27. It reached 96.54 cents on May 21, the most since February 1983. It has gained 5.4 percent this quarter and 9.9 percent this year.
Prices of raw materials influence the Australian dollar, also known as the Aussie, because commodity exports contribute about 17 percent to Australia's economy. The Aussie advanced last week as Rio Tinto Group said China agreed to pay a record price for iron ore, the nation's largest overseas shipment.
Australia's dollar was also supported after an index measuring the nation's inflation rose in June, reinforcing expectations the Reserve Bank of Australia will keep borrowing costs at a 12-year high tomorrow.
Consumer prices surged 4.8 percent from a year earlier, breaching the 3 percent limit of the RBA's inflation target, according to a monthly gauge released by TD Securities Ltd. and the Melbourne Institute in Sydney today. Prices climbed 0.5 percent from May, when they rose 0.3 percent.
RBA Governor Glenn Stevens will leave the overnight cash rate target at 7.25 percent tomorrow in Sydney, according to all 25 economists surveyed by Bloomberg News. Six say the central bank will raise the rate by the end of the year and one forecasts a cut.