The Australian dollar hit a two-year high on Monday as buoyant Asian stocks, a hefty yield advantage, higher commodity prices and a weak US dollar all worked in its favour. The currency's outlook appears so rosy that some investors see it testing its record peak of $0.9851 in coming weeks, despite having already surged 7.7 percent this month.
By late trade, the Australian dollar was at $0.9582 after climbing as far as a two-year peak of $0.9623, and up from $0.9494 seen here late Friday. Favourable yield spreads and bets that domestic interest rates could rise as soon as next month all helped to burnish its allure. Some traders said mutual funds were among buyers. The New Zealand dollar held steady $0.7344 from morning levels after ranging between $0.7335 and $0.7376. It hit an eight-month high of $0.7418 last week.