The Australian dollar reached its strongest level in a decade against the US dollar early morning in Sydney, Bloomberg reported.

At 07:27 Sydney time, the Australian dollar traded at 81.88 US cents, according to the agency.

The Australian dollar reached 82.10 against the US dollar, which was its strongest performance against the currency since December 1996, when a level of 82.14 was reached.

Speaking to Bloomberg about the Australian currency's performance, currency strategist Robert Rennie of Westpac Banking Corporation in Sydney predicted that it could do even better today.

He commented: "As long as we're in this situation where markets seek risk, the question is how much further can the Australian dollar go."

The currency also reached a ten-year high against the yen yesterday, with Reuters reporting that it traded at around 97.45 yen.

Reuters said the Australian currency's rally against both the dollar and yen could have been prompted by the Reserve Bank of Australia's decision to keep interest rates on hold at 6.25 per cent.

It added that some traders have suggested that the sterling could follow the Australian dollar's lead as the Bank of England's monetary policy committee announces its interest rate decision today.