The Australian dollar has risen in the foreign exchange market and was trading at US90.90c compared with US90.12c at the same time yesterday.

The currency rose against the US Dollar even as central bank took steps to keep the currency stable. The Australian dollar rose higher to US91.11c in Asia. The Reserve Bank of Australia governor Glenn Stevens has said that currency was fundamentally overvalued while speaking to the House of Representatives Committee on Economics.

Richard Grace, chief currency strategist at the Commonwealth Bank has said that the governor is aiming to reduce the currency value but has not taken aggressive steps to control the value. The risk of inflation has introduced risks for a weaker Australian dollar including higher import prices. The central bank has cut interest rates eight times since November 2011 to the level of 2.5 per cent.

"The outlook contains many uncertainties, not least the hand over from mining investment spending to sources of demand outside mining. The question then is: Will the additional demand likely to be generated outside mining as a result of these trends be just the right amount to offset the large decline in mining investment spending? No-one can answer that question with great confidence," Mr Stevens said.