Aussie dollar hits a 29-year high

Sydneysider Martin Parry tries unsuccessfully to tear an Australian 50 dollar note which is made of polymer, a durabile, clean and secure banknote that has a protective plastic type of coating to protect it from moisture, water, sweat, oil and other contaminents.

STEVE CHIOTAKIS: The Australian dollar today hit a near-three decade high against the U.S. dollar. In fact, today an Aussie dollar will buy you $1.03 in the U.S.

From Sydney, the BBC's Phil Mercer reports.


PHIL MERCER: The reason the Australian dollar is doing so well?

China.

Australia is rich with raw materials like iron ore, and coal. And strong Chinese demand for those commodities has sent prices soaring, taking Australia's economy -- and the Australian dollar -- to new heights.

Economist Shane Oliver is with AMP Capital Investors in Sydney. He says the currency shows no sign of slowly down just yet.

SHANE OLIVER: I think the Australian dollar is still a risky currency. It will still move up and down. It's just that global investors seem to have taken the view that the events of the last month, particularly in the Middle East and Japan, aren't enough to derail the global economies.

The good news for Australians is that a stronger currency makes it cheaper for the country to buy goods from abroad. But the strength in the currency also has downsides down under. The rising dollar makes trips here far more expensive, meaning Americans and others may visit less, hurting the country's key tourist industry.

For Marketplace, I'm the BBC's Phil Mercer in Sydney.

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