The Australian dollar has risen to a new 28-year high of 101.95 US cents after a successful auction of US Treasury bonds.
It inched past the previous record of 101.83 US cents, set in early November, in offshore trade before making a second run late this morning to pull up just shy of 102 US cents.
In Wednesday night's (AEDT) offshore session, there was an auction of $US29 billion worth of seven-year US Treasury notes, which exceeded expectations but followed a disappointing five-year bond auction on Tuesday night.
HiFX senior trader Stuart Ive said the Australian dollar had a big push upwards on Thursday morning.
"The main thing is there was a seven year Treasury auction and the yield for the auction came in slightly lower than the market had been trading previously," Mr Ive said from Auckland.
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"This saw an instant reaction in the currency markets with the euro, the Aussie, the kiwi all dramatically higher.
Mr Ive said at this time of year volumes and liquidity are quite thin, which tends to exaggerate currency movements.
"At the moment you've got very illiquid markets and you've got elevated commodity markets, those are the driving factors for the Australian dollar, combined with a little bit of putting risk on," he said.
