The Australian dollar is still outperforming its peers as investors bet on higher yielding instruments and the U.S. equities are believed to boost Asian stocks.

Australia's currency rose 98.62 U.S. cents as of 9:35 a.m. in Sydney from 98.63 cents in New York yesterday, after reaching a record 99.18 cents on Oct. 7. In Tokyo, the Aussie dollar traded at 80.67 yen from 80.59 yen.

The Federal Reserve's easing of its monetary policy "before long" delivered its impact as for the third day, the so-called VIX Index of volatility dropped, which is a sign that optimism sets and investors are now keen on assets tied to growth such as the Australian currency.

According to a market analyst at Macquarie Bank, the strong performance of the stock market has spurred the risk sentiment of investors.

The Standard & Poor's 500 Index rose 0.4 percent to 1,169.77 in New York yesterday and the Dow Jones Industrial Average rose 0.1 percent to 11,020.40, the highest levels since May for each market indicator, while the VIX Index fell 0.2 percent.

Benchmark interest rates are 4.5 percent in Australia and 3 percent in New Zealand has drawn investors to these countries' assets because Japan and US benchmark rates as low as zero.

Nevertheless, profit yields are at risk with currency market volatilities.