The Australian dollar is catching up with its US namesake as higher interest rates and bond yields lure investors from around the world.

The Australian dollar, also known as the Aussie, has risen 6.5% against the US dollar so far this year, making it the second-best-performing major currency after the New Zealand dollar. In the futures market, hedge funds and other money managers are holding the biggest bullish bet on the currency since April 2013, according to the latest data from the US Commodity Futures Trading Commission.