The Australian dollar has hit a one-and-a-half-month high after the cash rate was kept unchanged and the release of very strong housing figures.

At 0700 AEDT on Wednesday, the local unit was trading at 73.36 US cents, its highest level since October 16, and up from 72.58 cents on Tuesday.

The Australian dollar also hit a three-month high against the yen and a four-month high against the euro and the British pound, early on Wednesday morning.

On Tuesday, new data showed that approvals for the construction of new homes rose 3.9 per cent in October, much stronger than the three per cent fall the market expected.

The currency got a further boost after the Reserve Bank sounded quite positive about the economy in its interest rate announcement that kept the cash rate at a record low of two per cent.

Boris Schlossberg, director-FX strategy, BK Asset Management, said these two events showed that the Australian economy is surviving the plunge in commodity prices and the slowdown of the Chinese economy.

“The central bank noted that moderate expansion in the economy continues despite a large decline in capital spending in the mining sector,” he said.

“This has been perhaps the greatest surprise out of Australia as the economy has been able to shift growth from mining to services and remain at a steady expansionary pace in face of declining demand from China.”

On Wednesday, all eyes will be on the release of September quarter official economic growth figures, which are expected to show that the economy picked up from the sluggish June quarter.

AAP

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