NEW YORK (
) -- The Australian dollar soared to its highest post-float levels Friday.
The currency, floated in 1983, was rising 0.3% to USD 1.02420 after hitting the record high of $1.0294. It last hit a high on Dec. 31 at $1.0257.
A multitude of forces were driving the Australian dollar higher, including the country's strong mining sector amid soaring commodity prices, increased risk appetite as European and U.S. equities rebound, cross-border merger and acquisition flows as evidenced by the complex buyout transaction between European insurer
( AXAHY )
and Australian financial services firm
for AXA Asia-Pacific. Another factor was speculation of strong demand from Australian insurers in the face of big claims relating to the destructive floods.
has unveiled a $13 billion investment to expand its coal and iron ore operations in Australia, further spurring optimism about the country's mining sector.
In the U.S., data from the last few weeks points to promising signs of solid economic recovery in the country. On Friday, the government said fourth-quarter 2010 gross domestic product increased more than expected.
Also helping the currency was the weakening of the yen following a coordinated selloff of the currency by central banks from the G-7 group of industrialized nations last week to curtail appreciation. In addition, automatic buy orders kicked in with the Australian dollar's advance.
Investors who no longer view the Aussie dollar as a risky asset; but rather, a global safe-haven currency that also has high yields in a country with strict fiscal policy and high interest rates, offered another form of support. This trend has gained momentum because traditional safe-haven assets such as gold remain expensive.