The Australian dollar has moved to within half a US cent of parity with its US counterpart and could move higher in the coming days, even as markets remain nervous about upcoming Greek elections.
At 1700 AEST the Australian dollar was trading at 99.52 US cents, up from 98.95 US cents on Tuesday.
ForexCT head of research Steven Dooley said it had been a quiet day of trading, with Reserve Bank of Australia Governor Glenn Stevens' speech to the federal government's economic forum failing to generate the expected bounce in the currency.
He said that, while the market was cautious in the lead up to the Greek elections on June 17, the Australian dollar could move as high as 102 US cents by the end of the week.
"Certainly everything the charts are telling us at the moment, despite all the bad news, is that the Aussie dollar and gold want to go higher," he said.
"Everyone is very gloomy and everyone thinks the market is going to fall because of Spain and Greece, and that's normally when you see the market push the highest," he said.
He said mounting speculation that the US Federal Reserve may take additional measures to stimulate the world's largest economy was boosting demand for the Australian dollar.
"Of course the Australian dollar is one of the most sensitive instruments out there to expectations of stimulus."
