The market will be eager to see what RBA Governor Glenn Stevens has to say in Hong Kong this afternoon. Photo: Alex Ellinghausen
Australia's dollar has hit a fresh 2014 high on growing speculation that China will turbo-charge its slowing economy.
The Aussie was the best performing currency in overnight Tuesday, briefly touching US91.76¢ in overseas trade.
The local unit continued rise came despite international media talking it down, saying the Aussie was expensive considering there will be less demand for resources as China's growth eases.
But traders are hopeful Beijing will accelerate stimulus measures to stabilise its economy. Last week Chinese authorities approved five railway projects worth 142 billion yuan ($A25.03 billion).
Credit Suisse China economist Dong Tao expected it to be the beginning of a minor stimulus and expected more projects involving city tracks, anti-pollution and clean energy to be announced.
The Aussie is fetching about US91.65¢ and some traders are expecting it to rise to as high as US95¢.
But the Reserve Bank is unlikely to be alarmed. NAB head of global research Peter Jolly said RBA governor Glenn Stevens was likely to maintain that he is comfortable with the Aussie's level when he speaks in Hong Kong at Credit Suisse's Asian investment conference on Wednesday afternoon.
''Any policy related comments will likely repeat the recent sentiments expressed in the March policy meeting Minutes that the RBA is comfortably on hold for now,'' Mr Jolly said.
But Arab Bank Australia treasury dealer David Scutt wasn't so certain but he said volatility was assured.
''Should Stevens pull out the jawbone to knock the Aussie down, expect the pair [AUD/USD] to cascade lower before finding renewed bids below the US91¢ level,'' Mr Scutt said.
''Conversely, should he leave the jawbone at home, something he has done of late, expect the Aussie to add to recent gains as traders take the view that the RBA no longer see the currency as 'uncomfortably high' in light of recent strong domestic data.''