The Australian dollar tested the US96.25 cents mark yesterday morning, after closing at US96.16c on Thursday.

The Aussie, trading at levels not seen since 1983, was boosted by weakness in the US and fears for its economic outlook as the two largest home finance providers face the prospect of a bailout.

''(The) US dollar is weaker right across the board - financial worries are still very real and the US dollar remains sensitive to financial market developments,'' said RBC Capital Markets senior currency strategist Sue Trinh.

On Thursday night shares in the two largest US providers of home loan finance, Fannie Mae and Freddie Mac, plunged after an ex-Federal Reserve president said they may need a government bailout.

A surprise jump in Australian jobs figures increased the possibility of further rate rises, which make the Australian dollar an attractive investment.

The labour force grew by 29,800 last month, seasonally adjusted, more than the 10,000 jobs expected by analysts.

The data released ahead of the inflation figures due on July 23, adds to the view that the Reserve Bank of Australia may have more interest rate raisings ahead of it.

The unemployment rate was 4.2pc, seasonally adjusted, down from an unrevised 4.3pc rate at the end of May.

''It's been our position for some time that core CPI data (to be released July 23) will be very uncomfortable for the RBA,'' said ANZ economist Tony Morriss.

''It's premature to talk of rate cuts in this economy. If anything is going to happen its going to be a rate hike.''

The central bank is currently holding the cash rate at a 12-year high to 7.25pc.

The widening difference between high Australian interest rates and the low US fed funds rate of 2pc makes the Australian dollar an attractive investment.