The Australian dollar has surged in overnight trade, building on recent momentum in its steady push towards US95c. The latest uptick in the currency was driven by news interest rate hikes in the US were not imminent.
At 7am (AEST), the local unit was trading at US93.91c, up sharply from US93.62c at the close of local trade yesterday.
Over the past 24 hours the currency has seen a high of US94.01c and a low of US93.34c. It is the first time the local unit has hit US94c since November 19 last year.
Driving the currency higher yesterday were home loan approvals data that outstripped expectations and continued weakness in the US dollar on worries about the American economy.
The Australian dollar lost some ground in early US trade as optimism for the US economy rose on M&A activity and a positive earnings release from Alcoa. However, news that some members of the Federal Reserve believed their plans to raise rates had been misinterpreted saw US dollar investors clamouring for the exit.
"A number of participants noted the overall upward shift since December in participants' projections of the federal funds rate included in the March [update], with some expressing concern that this ... could be misconstrued as indicating a move by the Committee to a less accommodative reaction function," the minutes said, in a sign that rate rises are still a long way off.
The Australian dollar's strength will be tested at 11am (AEST) on the release of the latest jobs numbers from the Australian Bureau of Statistics. An improved read on the labour market could, however, see the local unit jump towards the US95c mark Bank of America Merrill Lynch analysts tipped a fortnight ago.