The main reason the exchange rate fell during the GFC was because there was an overall reduction in the risk appetite of investors. The AUD although regarded as a reserve currency nowadays, is regarded as a riskier currency to hold than the US dollar. So currency speculators sold off the Australian dollar and moved towards the US dollar. It should be pointed out that our dollar did not depreciate all that much against other major currencies. for example the euro / aus exchange rate remained fairly unchanged, and it actually improved against the pound sterling. So this wasn't something that just happed to the AUD, it happened to most currencies.
The current rise in AUD has stemmed from three factors. Firstly the australian economy has shown to be resilient in the GFC with good growth figures. So the AUD appreciated as speculators feel that the AUD is a safer currency to trade than previously (i.e. the risk appetitie concerns are no longer as much an issue). Seondly the commodities boom has continued. Much of the growth in the AUD comes off the back of the growth in China. The commodities boom explains why we almost reached parity in 2008, and it explains why we are again talking about reaching parity in 2009 / 10. Finally, as you should all know, the RBA increased interest rates and this induces a capital inflow. It has also been the trigger for many of these underlying factors to kick in.
