The Australian dollar nudged higher after latest official figures showed the nation’s economy is stronger than expected. According to the latest ABS figures, GDP grew 1.2 per cent in the June quarter 2011and 1.4 per cent from a year earlier.

Treasurer Wayne Swan, following the release of the data, dismissed concerns for the country's economic outlook, saying the GDP figures provided confidence in the underlying resilience of the Australian economy at a time when many advanced countries around the world were struggling.

“We have an economy with strong investment, rising incomes, sustainable consumption and low unemployment and these are the building blocks of a strong economy,” Mr Swan said.

His statement and the GDP data quickly cooled interest rate cut expectations.

At 0355 GMT, the Aussie was trading at US$1.0584, up from US$1.0535 prior to the GDP release. Overall, markets now think that the Reserve Bank of Australia could still raise interest rates in the near term to head off inflation that is above its target.