Australian dollar at seven-month high

SYDNEY, Australia (CNN) -- The Australian dollar has touched a seventh month high of 53.15 U.S. cents as expectations heighten that the central bank will lift interest rates next month.

The Reserve Bank of Australia next meets on April 2, and any rate move will be announced on the morning of April 3.

On Wednesday the Reserve Bank of New Zealand surprised market watchers by pushing up the official cash rate from 4.75 percent to 5.0 percent. Most economists had not expected it to tighten until April or May.

In Australia, where the benchmark cash rate is at a 30-year low of 4.25 percent, there is now widespread agreement among economists that the next rate move will be up, given recent positive data on economic growth, housing starts, and business and consumer confidence.

Westpac's general manager of economics, Bill Evans, expects rates to move in April and to reach 5.0 to 5.25 percent by the year's end.

Tightening cycle

HSBC Australia economist Grant Fitzner said Thursday that expectations of an early start to the Reserve Bank's tightening cycle are helping to push the Australian dollar higher. HSBC is opting for a May start, rather than April.

Fitzner said the dollar touched 53.15 U.S. cents overnight and now appeared to be consolidating around the 53 cent level.

In a research note, he said that while a corrective pullback was likely, any dips should be shallow and the medium-term trend was "firmly upward".

"The next move should see the Australian dollar targeting 54.40, with our medium-term target of 56 cents getting closer by the day," Fitzner said.

In late trade in Sydney Thursday, the Australian currency was trading between 52.96 and 53.01 U.S. cents.