The Australian dollar has extended its rally, heading toward 92 US cents, after official data showed local economic growth was solid in the June quarter.

At 0700 AEST on Thursday, the local unit was trading at 91.74 US cents, up from 91.29 cents on Wednesday.

In overnight trade, it peaked at 91.89 US cents, the currency’s highest level since August 19.

Official data on Wednesday showed Australia’s gross domestic product (GDP) was up 0.6 per cent in the June quarter for an annual rate of 2.6 per cent, which matched market expectations.

BK Asset Management New York MD, Boris Schlossberg, said the Australian dollar was one of the better performing currencies in overnight trade.

“Overall, the data showed that despite the decline in investment spending, as the mining boom cools, the Australian economy is beginning to make an adjustment to a more balanced growth model,” he said from New York.

“Perhaps this was the reason that the Reserve Bank of Australia assumed a more neutral posture in its statement as Australian monetary authorities saw some stabilisation.”

On Tuesday, the RBA kept the cash rate at 2.5 per cent but its statement gave no guidance on future rate movements.

Schlossberg said the local growth figures and the recent bout of positive economic data from China could help push the Australian dollar even higher in the next 24 hours.

“Given the change in sentiment, it should continue to outperform for the rest of the day, eyeing the 92.00 US-cent figure as the next target,” he said.

On Thursday, the Australian Bureau of Statistics will release international trade figures for July.

AAP