SYDNEY: The Australian dollar raced toward US$1.08 Thursday, smashing through a new record in a run analysts described as "nothing short of spectacular."
The "Aussie" hit a fresh 29-year high of US$1.0771 as the greenback softened and commodity prices held strong, renewing predictions that it would break $US.1.10 in the near term.
"The move we have seen since Wednesday's low of 1.0443 has been nothing short of spectacular," said IG Markets analyst Ben Potter.
"There's a 'fear of missing out' scenario playing out in the Australian dollar at the moment. Many traders have been looking for the Aussie to pull back over the last few days -- it hasn't and traders have started chasing it," he added
The commodities-linked Aussie has bounced an impressive 10 US cents since briefly dipping below parity following the Japan earthquake and Potter said it had rallied 33 percent in the past 12 months, with the trend "clearly up."
Shane Oliver, chief economist with AMP Capital Investors, said growing pressure for fiscal austerity in the United States weighed on the greenback, while confidence boosted commodity prices -- both positives for the Aussie.
"The Australian dollar is looking like it might reach our year-end forecast of $US1.10 in the next few weeks," said Oliver.
"This is all due to the combination of strong commodity prices and relatively high Australian interest rates."
Australia, the first major Western economy to raise interest rates after the global slump, has hiked its cash rate by 175 basis points since October 2009 as it rides a mining boom driven by Asian demand that helped it dodge recession.
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