The Australian dollar was trading near record highs Tuesday as strong prices for materials and the possibility of a rate hike Down Under buoyed the currency.

One Australian dollar would buy 89.76 U.S. cents, up from 89.25 cents late Monday. The currency hit a peak of 90.2 cents midway through the Monday session before retreating.

The last time the Aussie dollar was this strong was back in 1989. The CurrencyShares Australian Dollar Trust ( FXA) exchange-traded fund, which tracks the value of the Australian currency, was recently rising 0.7%.

The currency has been strong due to the high price of commodities, which has boosted exports from the resource-rich economy, explains Meg Browne, senior currency strategist at Brown Brothers Harriman in New York.

The country's proximity to China, which needs vast quantities of metals and other mined materials to fuel economic growth, has been an added advantage. And there is also the possibility that the Australian government may increase the cost of borrowing, making the currency more attractive to foreign exchange investors, she says.

In other currencies, the U.S. dollar was selling for 116.89 Japanese yen, down from 117.41 yen a day earlier. The British pound would buy $2.032, down from $2.0354 previously.

Euros were trading for $1.4092, up from $1.4042 in the last session.

The PowerShares DB G10 Currency Harvest ( DBV), which tracks major world currencies, was barely changed.

The CurrencyShares Euro Trust ( FXE) and the CurrencyShares Japanese Yen Trust ( FXY) were both up 0.4% in recent activity.

The CurrencyShares British Pound Sterling Trust ( FXB) was lower by 0.1%.

More from Currencies

Bitcoin Today: Prices Close to Flat in Low-Volume Trading

Bitcoin Today: Prices Close to Flat in Low-Volume Trading

Markets Wobble as U.S. Readies More China Tariffs

Markets Wobble as U.S. Readies More China Tariffs

Watch These Two Crypto Experts Fiercely Debate the Future of Regulation

Watch These Two Crypto Experts Fiercely Debate the Future of Regulation

Bitcoin Today: Prices Attempt to Rally Following Early Weakness

Bitcoin Today: Prices Attempt to Rally Following Early Weakness

Ether Prices Rally After SEC Director Says He Doesn't Consider It a Security

Ether Prices Rally After SEC Director Says He Doesn't Consider It a Security