The Australian dollar surged to four-year highs Thursday as investors deserted the U.S. currency after the presidential election victory of George Bush.
The local dollar, already buoyed by high interest rates, jumped one U.S. cent to 84.50 U.S. cents with financial market analysts predicting a continued upward trend.Market sentiment turned against the U.S. dollar after the election on concern over Bush's ability to reduce the U.S. trade deficit, Lloyds Bank chief economist Nicki Hutley said.
The Australian dollar was at 84.8 U.S. cents in mid-December 1984. Interest rates in Australia have been moving upward in recent months.
Economists said the higher Australian dollar could add to the country's balance of payments problems by increasing the cost of Australian exports.
Treasurer Paul Keating said Tuesday he would maintain a tight hold on the economy, mopping up excess money through monetary policy to curb consumer demand and rising imports.