Latest NewsAustralian Dollar Hits 27 Year RecordThursday, 30 March 2017

The Australian dollar has hit its highest point in 27 years against the US dollar, after an impressive jump in domestic employment revived speculation that rate hikes may be in the offing.

The Australian dollar rose as far as 99.13 US cents, up one per cent on the day, after taking out resistance at $US0.9851, and hit its highest since it was floated in 1983.

Australia's unemployment rate was a seasonally adjusted 5.1 per cent in September, compared with an unrevised 5.1 per cent in August, the Australian Bureau of Statistics (ABS) said on Thursday.

After a bumper employment reading showed 49,500 jobs were created last month, the country's bright economic outlook has also prompted a prediction of US-dollar parity within months. Goldman Sachs became the first major broker to forecast the dollar would exceed the greenback, saying it would hit $US1.06 next year.

Bureau of Statistics data this week showed a 13 per cent jump in the number of Australians going overseas in the year to July, while the number of short-term arrivals had grown by just 5.6 per cent.

The managing director of the Australian Tourism Export Council, Matt Hingerty, said the dollar's rise had played a role in driving the industry into deficit - where outgoing tourist dollars exceeded incoming dollars.

''Australians are getting better value travelling overseas.''

National Australia Bank head of research Peter Jolly said the better than expected employment figures had put a Reserve Bank of Australia (RBA) November interest rate hike "back in play".

"On Tuesday the RBA surprised and the currency came off and today we had a very strong employment report for September and that has seen the market price back in a much greater chance the RBA will hike in November," Mr Jolly said.

The futures market had now priced in a 65 per cent chance of a rate hike in November.

Mr Jolly said the local currency had reached a "pivotal level".

"They're critical levels here," he said.

However, he predicted the local unit would stay around current levels as traders began profit taking ahead of Bank of England and European Central Bank meetings during the offshore trade.

"We'll see some congestion," he said.

He said an RBA rate rise in early November and quantitative easing in the US would be enough to see the local unit reach parity with the US dollar.

"It seems that we are destined to have a crack at parity," he said.

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