The Australian dollar hit a new 23 year high today, rising above 90 US cents for the first time since June 1984.

The currency then retreated, before driving over the 90 cent mark again to trade around 90.20 USc at 11.30am. The dollar opened at 89.93 USc. Traders are now openly speculating that the Aussie will hit parity with the US dollar within the next couple of months and join the Canadian dollar (called the loonie) in regaining the level $A1= $US1.

The currency was helped by Friday’s US jobs figures which suggested the American economy was doing better than expected and had not been hurt by the credit freeze, although the fallout from the housing crunch was continuing to have an impact on employment. Far from losing 4,000 jobs in August as the first estimate said, Friday’s report on September revised August to a gain of 89,000 jobs.

Economists say the news would all but rule out another rate cut; something that might have not supported the Australian and other foreign currencies. But with growing expectations of a rate rise in Australia next month after the next Reserve Bank meeting; foreign investors are chasing the higher returns on offer here, and the prospect of more in November.

The Japanese yen fell against the Aussie dollar on Friday and again today as the carry trade continued to rise. The yen fell to its lowest level in two months against the euro. But the news saw the US dollar weaken and the Aussie and other currencies strengthened as a result.