Australian dollar soars to two year high against the US Dollar

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The Australian dollar continued its surge against the US Dollar as it touched past the 96 US cents mark this past week. In the past three weeks the Aussie has gained 4.6 percent, jumping from 91.9 to 96.15 US Cents late last night.

A number of factors have influenced the rise against the greenback including a weak US dollar, strong commodities performance and an expected interest rate increase in Australia as soon as next month. The Reserve Bank has left the 4.5% interest rate unchanged for a number of months.

The 4.5% rate is among the highest in developed countries and an increase would only further foreign interest in local high-yield investments.

The continued downturn of the US dollar is also a major contributing factor to the rise of the Australian dollar. There is speculation that the US Federal Reserve and President Obama will pump more aid dollars into the economy, further diluting the value of the currency. It will come as no surprise if by the end of the year we are looking at equal dollar values of the two currencies. Talks of parity have been non-existent since mid 2008 before the recession set in.

The US dollar continued to fall against the Euro, Yen and neared a historic low against the Swiss Franc.

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