Aussie hits new highs

The Australian dollar's persistent strength has earned it the moniker 'the southern Swiss franc'. But how long can it last?

"Twenty years ago the Australian dollar was mocked as the South Pacific peso; now it's the southern Swiss franc: a globally recognised safe haven," Gerard Minack and Katie Hill at Morgan Stanley tell FTAlphaville.

The 'Aussie' hit a five-month high this week, pushing above $1.1060 after the Reserve Bank of Australia (RBA) said it would leave interest rates unchanged. It's now not far off the 30-year high of AUS$1.1080 against the US dollar that it reached last year. The world's fifth-most traded currency has jumped by 8.3% since the central bank cut rates on 5 June to 3.5%. Overall, it is up a staggering 75% from its post-Lehman Brothers lows in 2008. The rebound comes despite falling commodity prices, driven by the slowdown in China, Australia's biggest trading partner.

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