Dollar dazzles at record high on commodities, shares

DOLLAR sets a fresh post-float high as commodity prices surge amid a strong showing on Japanese share markets at the end of last week.

THE dollar set a fresh post-float high this morning as commodity prices surged amid a strong showing on Japanese share markets at the end of last week.

At 7am (AEST), the local unit was trading at 105.70 US cents, up from Friday's local close of 105.25 cents.

Since 5pm (AEST) on Friday, the Australian dollar has traded between a low of 105.15 US cents and a high of 105.80 cents.

The latter was the currency's highest level against the US dollar since floating in 1983.

HiFX trading director Mike Hollows said the unit had been boosted by strong commodity prices and firm risk sentiment in Japan.

"The Aussie has had another good day," Mr Hollows said.

"It continues to push up on broad based commodity strength and risk appetite flowing from Japan.

"We're in uncharted waters at these levels and liquidity has become quite thin."

Oil prices surged on Friday following a drop in the US dollar and continued jitters about shipments from the world's major oil suppliers.

Benchmark West Texas Intermediate for May delivery jumped $US2.49, or 2.3 per cent, to settle at $US112.79 per barrel on the New York Mercantile Exchange.

Crude oil has set new 30-month highs almost every day this week.

The 19-commodity Reuters-Jefferies CRB index rose one per cent to a two-and-a-half-year high.

The Australian dollar is a risk or commodity sensitive currency, broadly rising and falling in line with the price of resources.

Meanwhile, shares in Japan closed higher on Friday, with the Nikkei225 index closing up 177 points at 9768.08 points.

Mr Hollows said positive risk sentiment had been a feature of Japan's share market for the past couple of weeks.

In early March Japan was rocked by a series of earthquakes, leaving thousands dead, while critically damaging a number of nuclear power plants.

In terms of economic data due today, the Australian Bureau of Statistics was scheduled to publish lending finance data for February at 11.30am (AEST).