The Australian dollar is powering ahead today, breaking through the US77c mark as investors dump low yielding currencies for higher ones such as the Aussie.

At 9.57am (GMT) the local currency was trading at US77.14c up from US76.71c in yesterday’s trading.

Just when the carry trade seemed dead, the Australian dollar has made a stunning comeback on the back of ECB and Bank of Japan monetary policy which have seen them push interest rates down into negative territory.

This has allowed investors to snap up ultra-low loans in Japanese yen and the Euro to by the Aussie dollar.

Also helping the recent strength of the Australian dollar is expectations that the Fed may hold off raising interest rates this year even as the US economy seems to be on the rise,

“Higher yielding currencies are stoked by booming risk appetite as the market is buying into the underlying premise that the US economy is robust, but not churning at sufficient levels to warrant any immediate policy response,” noted  OANDA Australia and Asia Pacific senior currency trader Stephen Innes .

There may be some volatility in the currency markets tomorrow when the Bank of New Zealand announce their latest interest rate decision with the market expecting a cut of 25 basis points to 2 percent which may have a knock on effect to the Aussie dollar as the currencies are closely connected.