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Aussie dollar scales fresh heights

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The Australian dollar has scaled fresh heights against the pound and remains in near-record territory against the euro and the US dollar as the prospect of higher interest rates lures investors around the globe.

The dollar touched 67.675 UK pence in recent trading, the highest since 1985. It also passed though 77 euro cents for the first time this year, and remains within range of its previous record against the european currency of 77.35 euro cents reached at the end of 2010.

The Aussie dollar’s latest surge was sparked by a surprise jump in the June quarter inflation figures released yesterday, which shifted the likelihood that the Reserve Bank’s next move would be to cut interest rates. Odds now favour a rate rise, although most commentators doubt the central bank would lift borrowing costs at a time of worries about the debt woes in US and a slew of European countries.

The Australian dollar rocketed one US cent yesterday to reach $US1.1081 in late local trading, the highest since the local currency floated in 1983. It eased to $US1.104 at the local close and was recently trading at $US1.1051. It was also worth just under 86 yen.

Read more from The Age: http://www.theage.com.au/business/dollar-scales-fresh-heights-20110728-1i1pu.html#ixzz1TNwUgfmt

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