The Australian dollar held near 15-month highs, supported by a struggling US dollar, record high gold prices and gains in regional stock markets.
The Aussie reached 93.45/50 US cents at the local close, up nearly a cent from the 92.55 US cents late on Friday and within sight of a 15-month high of 93.70 US cents hit on Thursday, with the currency in broad demand from US banks to pension and insurance funds.
It was also buying 83.7 yen, 62.43 euro cents and 55.88 pence.
"There's buying across the board," said Tony Darvell, a trader at Easy Forex. "People are looking at the weak US dollar and record gold prices."
With a buoyant local outlook of rising interest rates and strong economic growth, and a resilient Chinese economy that wold support commodity prices, National Australia Bank predicted the Aussie may hit US$1 by March.
"There's a lot which needs to go right but there's a very good chance it will," the bank said in a note to clients. NAB expects the Aussie to rise to 97 US cents by the end of 2009, and hovering between $US1-$US1.03 in 2010 - among the more upbeat Aussie forecasts in Australia.
Spot gold prices hit a record high today as investors hedged against a weak US dollar while Asian stocks edged up, helped by upbeat reports from US retailers.
Among the highlights for local trade this week is the Reserve Bank of Australia's release tomorrow of its minutes for the Nov. 3 policy meeting, when it raised rates by 25 basis points to 3.50 per cent.
Investors will look for clues about whether the RBA will raise rates again in December, or perhaps even accelerate the speed of tightening next year.
For now, markets are betting on a 78 per cent chance of a 25-basis-point rise in December.
The Aussie dipped against the yen after Japanese growth data beat expectations, but recovered on a view that Japan's economy should slow again as falling wages cut demand for cars and electronics.
The Aussie fell to as low as 83.26 yen before recovering to 83.73, up from Friday's 83.49.
Aussie bond futures were mixed, taking a lead from listless trade in US Treasuries. Three-year bond futures were up 0.01 point at 94.88, and the 10-year contract was down 0.02 points at 94.40.
Reuters, with AAP
