The Australian currency is expected to continue its rally over the near term especially if the Reserve Bank of Australia decides to raise the interest rates.

Analysts said that should the RBA hike interest rates over the coming months, the Australian dollar could even breach the 96.50 cents level.

In this morning's trade, the Australian dollar rose as the difference between 10- year yields in Australia and the U.S. was near to the widest in more than two years. This transpired after a report showed an Australian index of leading economic indicators rose in July.

New Zealand's dollar advanced for a fourth day versus the U.S. currency before a report tomorrow forecast to show the nation's economy grew at a faster pace in spite the earthquake that shook Christchurch.

The RBA categorically said in its Sept. 7 minutes of the meeting that it will remain "alert" to signals of a weaker global growth and "members considered that if the central scenario came to pass it was likely that higher interest rates would be required, at some point," the Reserve Bank of Australia said in minutes of its Sept. 7 meeting released in Sydney on Tuesday.

The RBA raised borrowing costs in six quarter-percentage- point steps from October to May, taking the benchmark overnight cash rate target to 4.5 percent.