The Australian share market rode the updraft of the record breaking Australian dollar today. A global flood of money and subsequent short squeeze have combined to push the market to within a whisker of its highest level in five months.

Metals prices extended their booming gains over night, pushing resource shares up strongly. Global giant Rio Tinto has led the sector, playing catch up with the London listed shares which leapt more than 4 % to break through 40 British Pounds overnight.

Many of the best known names in mining are up more than 3 % today, with only a handful of the smallest miners not participating in the rise. Finance shares have recaptured the ground lost over the last two days, and transport and industrial stocks are higher.

A rotation towards growth stocks is weighing on defensives. Woolworths, Harvey Norman and Crown are all down on the day. CSL continues to be pummelled by concerns about its earnings as the Australian dollar approaches parity with its US counterpart, and Resmed shares have accelerated their slide ahead of a company discussion of its Q1 result tomorrow morning.

Michael McCarthy, Head of Dealing - Asia Pacific