The Australian dollar touched a fresh 28-year high against a declining US currency on Thursday, while the New Zealand dollar made a six-week peak helped in part by board-based strength in global commodity prices. The Aussie basked at $1.0198, having cleared the overnight high of $1.0184. That brought gains for the month to around 6.4 percent and left it almost 14 percent higher for the year. It last traded at $1.0163.
The New Zealand dollar also boasted sizeable gains to reach a high of $0.7691, having bounced off a low of $0.7585, which now provides support. Next major resistance was at $0.7727. The kiwi was last at $0.7666. The Aussie was not far from a record high on the euro at A$1.3008, bringing its gains for the year to almost 23 percent, and near a 25-year peak on sterling at A$1.5248.
The currency was underpinned by renewed gains in metals prices with LME copper climbing to a record high, and six-week highs for zinc, lead and aluminium. Iron ore, one of Australia's top exports, holding above $170. Commodities have been buoyed by growing optimism on global growth prospects for 2011, coupled with expectations that monetary policy will stay stimulative in many major economies.
Australia is a major exporter of commodities and the strength of prices is delivering a huge boost to the country's terms of trade, fuelling profits, investment, employment and incomes. That is a major reason the Reserve Bank of Australia (RBA) is expected to tighten policy further next year even as other developed nations keep their rates around record lows.
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