The Australian dollar has opened stronger after a sharp rise in the price of gold helped the currency post a fresh 25-year high during the overnight session.
The Australian dollar hit $US0.9736 a little after 0200 AEST, eclipsing the $US0.9732 reached on January 28, 1983, which was during the days of a fixed exchange rate.
At 0700 AEST, the Australian dollar was trading at $US0.9716/19, up from yesterday's close of 0.9678/81.
During the overnight session, the Australian dollar moved between a low of $US0.9667 and a high of 0.9736.
Wells Fargo currency strategist Vassili Serebriakov said the surging price of gold helped support the Australian dollar's moves higher.
Gold futures for August delivery surged $US13.10 overnight to its highest level in three months, settling at $US973.70 on the New York Mercantile Exchange.
"As far as commodities are concerned, it's probably too early to call a top," Mr Serebriakov said from New York today.
"That's helping the commodity currencies."
The US dollar started the New York session positively in reaction to the US Treasury's plan to inject funds into troubled government-sponsored mortgage backers Fannie Mae and Freddie Mac.
But as equity markets fell into the red, risk aversion took hold and the US dollar was sold off.
Mr Serebriakov said investors were choosing to buy currencies such as the Australian and Canadian dollars against the US dollar during this latest bout of risk aversion, rather than the Japanese yen or Swiss franc.
"Currencies that are backed up by solid fundamentals and sound monetary policy are benefitting," Mr Serebriakov said.
"I wouldn't claim that this is a framework for long term, but that's the current thinking.
"The yen is doing OK against the US dollar, but on the crosses - against the Australian dollar and the euro - it hasn't been doing that well."
The Reserve Bank of Australia (RBA) publishes the minutes of its July board meeting at 1130 AEST.
On July 1, the board left official interest rates unchanged at a 12-year high of 7.25 per cent, the fourth straight month rates have been on hold.
"All the recent indications are that rates have probably peaked, that's the message that we would expect," Mr Serebriakov said.
"Of course the inflation situation remains, to a certain degree, unpredictable given what oil prices are doing."
