THE Australian dollar continued its upward trend on Wednesday on weak US economic data and speculation of an official interest rate rise next week.
At 1700 AEST, the Australian dollar was trading at 97.03 US cents, up 1.31 cents from Tuesday's close of 95.72 cents.
The Aussie has now reached its highest value since July 2008.
It traded on Wednesday between 96.59 cents and 97.03 cents.
Making news on Wednesday, Reserve Bank of Australia (RBA) board member Jillian Broadbent gave an upbeat assessment of the domestic economy, saying growth in China would translate to growth in Australia in 2011.
RBC Capital Markets senior economist Su-Lin Ong said Ms Broadbent's comments helped boost the local unit.
"She was fairly positive on the outlook for China and Australia, and that gave the Aussie a bit of a lift," Ms Ong said.
Meanwhile, the US dollar continued to weaken against other currencies after a handful of reports underscored worries about the weakening US economy.
The two surveys, overnight on Tuesday (AEST) on US consumer confidence and the outlook of CEOs of major US companies, suggested that American shoppers were increasingly downbeat about the economy.
It also showed top business executives remained cautious and were increasingly likely to cut back on hiring plans.
"The data were all informally weak so that did weigh on the US dollar," Ms Ong said.
"It's obviously fuelled speculation of further quantitative easing in the US and that's also weighing on the US dollar."
The futures market is now pricing in a two in three chance the RBA will take the cash rate to 4.75 per cent from 4.5 per cent, when it meets on Tuesday.
"Whether they move next week or the month after, I think is a bit irrelevant," Ms Ong said.
"At the end of the day, the rate differential continues to move in favour of the Aussie dollar, so I think all the stars are clearly lined up for the Aussie and that's why it's moving towards these levels."
The dollar reached US96.72c, up one US cent from yesterday's local close of US95.72c.
