The Australian dollar had another strong day, posting its best quarter against the greenback since at least 1985, as optimism the global slump is easing buoyed demand for higher-yielding assets.
At the local close, the dollar was trading at $US0.8130, up 1.2 US cents - or 1.5 per cent - from Monday's close of $US0.8009.
During the day, the unit moved between a low of $US0.8068 and a high of $US0.8147, the latter reached in the last hour of the local session.
Growing optimism about the prospects of an economic recovery drew investors towards higher yielding assets such as the Australian dollar and equities on Tuesday, resulting in across-the-board US dollar weakness.
"People are buying into the thought that the recession is over and there will be growth outside of the US, going forward,'' HiFX senior consultant Derek Mumford said.
Mr Mumford said some end-of-financial year book squaring may also have played a role in the Tuesday's price action.
The Australian dollar ended the 2008/09 financial year down about 15 cents from its July 1, 2008, level of $US0.9500, but the local currency has been a strong performer over the past three months.
The unit appreciated 17 per cent against the US dollar in the June quarter, while against the cross-rates it advanced 13 per cent against the Japanese yen and 9.6 per cent against the euro.
Mr Mumford described the Australian dollar's performance in the June quarter as "phenomenal''.
"It was best quarter for the Aussie dollar in 25 years,'' Mr Mumford said. "It's been a very quick turnaround. I didn't really expect the pace of this.''
Mr Mumford said the Australian dollar was due for a period of consolidation over the next four to eight weeks and expected the currency to trade between $US0.7750 and $US0.8250.
"At the moment we don't see it breaking outside of that,'' Mr Mumford said.
US data due during Tuesday night's (AEST) offshore session includes the S&P Case-Shiller house price index for April, the Chicago Purchasing Managers Index (PMI) for June as well as consumer confidence data from the Conference Board.
AAP
