The Australian dollar extended its gains against its U.S. counterpart for a second day on speculation that the central bank will continue its increase of the interest rates with the improvement of the domestic economy.

The Reserve Bank increased the interest rate to 4.25 percent today amid the signs of the improving economy, bolstering the Australian dollar’s strength. The Aussie, as the Australian currency is commonly nicknamed, is closing to parity with the greenback as prices for commodities rise, reflecting the increasing purchasing capability of buyers, and the nation’s economy expands, fueling optimism and the bullish outlook for the currency performance in the future. At present time the Australian currency reached its highest level versus the U.S. dollar since January 19th 2010, though some analysts think that by June the Australian dollar can decline to 0.9 level.

AUD/USD traded at 0.9224 as of 12:16 GMT after opening at 0.9212.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.