The Australian dollar has reached a 28-year high against the British pound and is climbing further against the yen.

The dollar touched 68.5 British pence overnight, its highest point since 1985.

The local currency is also fetching 97.7 Japanese yen, the highest level since mid-2008.

Commonwealth Bank currency strategist Joseph Capurso expects the dollar to remain around these levels for the rest of the year.

"The Aussie against the pound is going to be at these very extreme levels for probably most of the year, unless things in the UK turn around fast," he said.

He says while the dollar is enjoying a strong position against most major currencies, weakness in the UK economy is driving the pound lower.

"The Aussie is rising and is very high against most currencies, particularly the European currencies, but the pound has been struggling because of concerns about the government's budget position and also the central bank in the UK, the Bank of England, is likely to buy more assets in a bid to stimulate the slumping economy," he said.

The dollar also hit a four-and-a-half year high against the yen this afternoon.

ANZ currency strategist Andrew Salter says that is because of government moves to boost Japan's economy.

"Economic growth for a number of years in Japan has been very lacklustre, similar to the UK actually," he said.

Mr Salter said he believes the dollar can reach 69 pence this year, because there is little sign the UK economy will pick up as weakness in the eurozone spill over.

"The Australian dollar against the pound is at very high levels," he said.

"The strength is really a reflection both of the firm Australian dollar and the weak pound, so it's on both sides of the equation."

However, the Australian dollar is slipping against the greenback after the latest trade data showed China's imports of iron ore dropped last month.

The official figures painted a mixed picture of China's economy.

Exports soared by nearly 22 per cent in February compared with the same month the year before, which was much more than expected, and suggests global demand is improving.

However, imports dropped more than 15 per cent, with shipments of iron ore to China tumbling as factories closed for the Lunar new year holidays.

The dollar was buying 102.44 US cents at 3:28pm (AEDT).