The sharemarket eked out a small gain on Wednesday as investors switched support from the big banks to the miners.
But the dollar fell to 19-month lows after the release of better than expected US economic data.
The S&P/ASX 200 Index added just 4 points, to 4974.7, while the broader All Ordinaries Index rose 8.6 points to 4959.2.
The market was boosted by strong gains in the materials sector, with Rio Tinto and BHP Billiton jumping 3.4 per cent and 2.6 per cent, and Fortescue Metals surging 4.1 per cent. Those gains offset losses among financial stocks, which lost 1.3 per cent overall.
Goldman Sachs analysts published a research note saying it was time to switch from banking to mining stocks, citing the falling dollar, rising bond yields and global economic growth.
They said mining valuations were at decade lows, while banks were 40 per cent more expensive than the big miners using 10-year average earnings for valuation.
The surge in mining stocks came as the world's biggest coking coal exporter, BHP Billiton, said it expected the market to be "comfortably supplied" in the near term, with supply swings determined by US mines and demand swings dominated by China.
All of the big four retail banks were weaker. Shares in Commonwealth Bank fell $1.71 to $66.89, NAB shed 57¢ to $30.55, Westpac was down 75¢ to $28.72 and ANZ lost 48¢ to $27.60.
Consumer discretionary stocks added 1.8 per cent, industrials 1.4 per cent and energy 0.7 per cent. Telcos slipped 0.2 per cent.
But it was trading in the dollar that again took centre stage, as the currency fell to its lowest level in 19 months, to US95.28¢.
It had analysts scrambling to adjust forecasts, with some now thinking the dollar could find technical support around the US94¢ level.
Westpac chief currency strategist Robert Rennie said the dollar could fall as low as US93¢ in the short term, with its movements dependent on data such as Thursday's capital expenditure report, the Reserve Bank's board meeting next week and first-quarter gross domestic product figures.
"Those are all important factors, but I would certainly anticipate that as we start to move into the low 90s - US93¢ to US94¢ - that we will start to see some more demand coming through for the Aussie," Mr Rennie said. "It means that we've had a material correction."