The Australian dollar hit a new post-float high of 99.71 US cents as analysts say they expect it will hit 1.02 US dollars within the next few months.
The dollar hit its new record after the release of better-than-expected consumer inflation expectations data from Westpac and the Melbourne Institute.
Currency analysts say the Australian dollar is expected to reach parity with the US dollar by early November, but would not be surprised if it happens in the next 24 hours.
"They dollar could reach parity when European or US markets open later tonight," CommSec Chief Economist Craig James told SBS.
"I think it is more a matter of hours than days or weeks."
Mr James says there are two factors driving the Australian dollar higher: the share market and the price of gold.
He says this a historical situation.
"We haven't seen this for 28 years. It just highlights how far the Australian economy has come over time. We were considered an old economy. Now we are not. Commodity prices, things like iron ore prices are very much in vogue at the moment.
He says the Aussie dollar could go beyond parity."We think that once we get through parity the Aussie dollar will rise perhaps to $US1.02 per Australian dollar".
"As we have a situation where US authorities are looking to pump more and more US dollars in circulation, this will devalue the US dollar and certainly suggest the Aussie goes higher from here," he told SBS.
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