The main reason for the outperformance of the Aussie dollar is the weakness in the US dollar, but demand for our resources and commodities, along with higher interest rates, are also aiding the one-time Aussie 'battler'.
The interest rate differential could widen with the Reserve Bank tipped to lift the official cash rate next Tuesday, despite some very soft housing numbers Thursday.
Predicting currency moves is a tough ask but on Thursday, ANZ put out a note revealing that it expects the Aussie will hit parity with the US dollar sometime in 2011.
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It does warn however that there may be a bit of a pullback before the Australian dollar gets there.
For more on the future direction of interest rates, I spoke with Tony Morris, currency strategist at ANZ.
