And oil futures have hopscotched to a record high of $US93.20 a barrel, helped by the weak US dollar. The currency story is twofold. The US dollar is spiralling downwards, with further rate cuts anticipated this week.

Moving in the opposite direction is the Australian dollar, which is receiving additional impetus from speculation that the Reserve Bank will raise official interest rates next week. Last night, the Aussie climbed to a fresh high of US92.72¢ and a cohort of currency strategists predict it will reach parity with the US dollar within weeks or months. The highest the dollar has traded since it was floated on December 8, 1983, was US96.53¢ in March 1984, according to Bloomberg. Sonray Capital Markets chief economist Clifford Bennett — who believes the Aussie could reach $US1.08, or even $US1.12, within two or three years — said the US dollar was no longer the world's sole reserve currency.

Investors were looking to diversify their portfolios into a variety of currencies, including the euro, the pound and the Australian dollar, he said. "There's been a sea change … the Australian dollar is now seen as a quality asset." This change helps explain why the Australian dollar is so high against the enfeebled US dollar, though it has not risen as impressively against other major currencies.

But the Aussie has posted a 23-year high of 72.4 points on the Reserve Bank's trade-weighted index, a measure of the dollar's value against the currencies of Australia's main trading partners. AMP Capital Investors' head of investment strategy and chief economist, Shane Oliver, said the high Australian dollar was good news for consumers, who would pay less for imports. "Imports account for nearly 30 per cent of consumption goods, notably things like cars, clothing and many electrical goods," Dr Oliver said.

But he said resource companies, multinational industrials and building material stocks would lose out, as the falling US dollar cut profits. "With 30 per cent or so of listed company earnings sourced overseas, a 10 per cent rise in the $A will mechanically cut earnings by about 3 per cent."

But Commonwealth Bank commodity strategist Tobin Gorey said the deflating US dollar was also supporting commodity prices, including oil. Credit Suisse Asia Pacific's head of rates trading, Sean Keane, said interest rate derivatives showed the market was certain the US Federal Reserve would cut interest rates by 25 basis points early on Thursday, Australian time.