Australia's currency, known as the Aussie, rose for a fourth day after a stock index of U.S. financial companies slumped on speculation regional banks are short of capital.
Australia's currency rose 0.5 percent to 97.36 U.S. cents at 12:04 p.m. in Sydney, compared with 96.85 cents in late Asian trading yesterday. It earlier touched 97.40 cents, the strongest level since 1983. The currency bought 103.15 yen from 103.31.
The Australian dollar held gains after the Reserve Bank of Australia said in minutes of its July 1 meeting that ``there had been no material change in the inflation outlook'' and its 12- year-high benchmark interest rate is restraining the economy.
The Australian dollar extended the past five days of gains to 2.3 percent, the best performance among the 16 most-active currencies, before Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson address U.S. lawmakers on their response to widening credit-market losses.
Global banks and securities firms have reported losses of about $400 billion as the subprime-mortgage market collapsed. Australia's five largest lenders shunned investments linked to the subprime market, helping them avoid the losses reported by firms on Wall Street and in Europe.
Australian government bonds gained, pushing the yield on the 10-year security down 9 basis points, or 0.09 percentage point, to 6.33 percent. The price of the 5.25 percent bond maturing in March 2019 rose 0.631, or A$6.31 per A$1,000 face amount, to 91.746.