THE dollar is higher this morning, moving further into record territory after the five-day Easter and Anzac Day weekend.
The local currency continued its move upwards on the back of strong commodity prices and optimism about the global economy, which is encouraging traders to invest in high-risk, high-yield assets such as the Australian dollar.
At 7.00am (AEST), the local unit was trading at 107.88 US cents, up from Thursday's local close of 107.57 US cents.
Since 5.00pm (AEST) on Thursday, the dollar has traded between 106.77 US cents and 107.93 US cents, its highest level since the currency was floated in December 1983.
Bank of New Zealand currency strategist Mike Jones said encouraging economic data from the US and rising commodity prices are helping support the Australian currency.
"Certainly the Aussie dollar remains the darling of the currency markets," Mr Jones said from Wellington.
"Risk appetite globally is buoyant (and) that's keeping commodity prices strong and equity climbing.
"Certainly, the commodities backdrop is still very strong. Gold and silver prices are making record highs on an almost daily basis and industrial metal prices are still very strong.
Mr Jones said downward pressure on the US dollar was applied by the expectation that the US Federal Reserve will keep its interest rate at virtually zero per cent for some time.
That was in stark contrast to the European Central Bank which raised rates earlier this month, and the Reserve Bank of Australia (RBA), which last raised its cash rate in November and is expected to raise it again in the next few months.
"It's a case of the US being left behind in a rising interest rates environment and that's providing a clear drag on the US dollar," Mr Jones said.
Economic data due today includes the release of Australian inflation data, the consumer price index, with the headline annual rate expected to be 3.0 per cent, according to an AAP survey of 13 economists.
The RBA aims to keep headline inflation between 2 to 3 per cent.
Mr Jones said he expected the dollar to trade today in a range between 107.40 US cents and 108.10 US cents.