Australia's currency approached a 25-year high as concerns that the U.S. subprime-mortgage crisis may deepen prompted investors to seek higher-yielding assets in the South Pacific nation.
Australia's currency bought 96.84 U.S. cents at 2:20 p.m. in Sydney from 96.62 late in New York on July 11. It earlier reached 97.11 cents, near the July 11 high of 97.16 cents, which was the strongest level since February 1983. The currency traded at 103.04 yen from 102.69 yen.
The Australian dollar is the second-best performer among the 16 most-active currencies in the past five days, gaining 1.7 percent, as Fannie Mae and Freddie Mac, the two largest buyers of U.S. home loans, suffered a collapse in confidence sending their share values down by about half last week.
Australia's currency has risen 10.3 percent this year on speculation the nation's financial institutions have avoided the worst of the U.S. subprime crisis that's caused more than $400 billion in losses due to a lack of confidence in credit markets.