Analysts at a global investment bank are tipping the Australian dollar could return to parity with the greenback by the end of this year.

The dollar reached a four week high of 93.86 US cents overnight, extending last week's rally after the European Central Bank announced more measures to boost the region's economy by further cutting interest rates.

Morgan Stanley currency strategists say they have now boosted their forecasts for the dollar as overseas investors increasingly buy up Australian bonds in the hunt for higher returns.

Official figures show overseas investors bought nearly half of all Australian bonds in the first three months of this year, driving up the dollar.

The bank says, in particular, the rally is being driven by Japanese investors who bought nearly $11 billion worth of Australian bonds between October and April.

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Morgan Stanley's head of Asian foreign exchange and interest rate strategy, Geoff Kendrick, says Australian assets are attractive as they have the highest returns of any nation with a top-level AAA rating.

"There are very few AAA assets remaining - there's only the likes of Singapore, Germany, Norway, etc," he told ABC News.

"Australia, with the RBA at 2.5 per cent, the yields are the most attractive in that AAA bucket."

Mr Kendrick says, if that continues, falling commodity prices will not make a dent in the dollar.

"Even if our miners are hurting slightly compared to where prices were before, there's really nothing the RBA can do to stand in the way of this train," he told ABC News.