The Australian dollar touched a new post-float high today when it climbed above the 110 US cent mark but gave up ground in afternoon trading as the death of Osama bin Laden drew investors back to the greenback.

The Aussie hit 110.11 US cents shortly after 10.30am today, according to Bloomberg. The dollar last saw 110 US cents in December 1981.

By the local close, though, the dollar had eased back to 109.38 US cents. It was also buying 89.1 yen, 73.9 euro cents and 65.6 pence - not far off a 26-year high against the British unit.

Other markets, particularly stocks, rose on the news, announced by US President Barack Obama at about 1.30pm, eastern Australian time, that US special forces had succeeded in hunting down the al-Qaeda leader in Pakistan.

Westpac senior market strategist Imre Speizer says the local dollar is being pushed higher on expectations the central bank will lift the cash rate and on US dollar weakness. The RBA board meets tomorrow to decide on interest rates.