The Australian dollar has surged to its highest level in a month after the US Federal Reserve announced a renewed program to give the flagging American economy a boost.
The US central bank will spend $US40 billion ($A38 billion) to buy mortgage-backed securities for as long as it takes to reduce the unemployment rate.
The move is aimed at dragging down long-term interest rates for lenders to encourage more borrowing.
At 1700 AEST, the local unit was trading at 105.85 US cents, up from 104.52 cents yesterday.
During local trade on Friday, the Australian currency peaked at 105.91 US cents, its highest level since August 9.
The euro also surged against the US dollar, going as high as 130.54 US cents, its strongest level in four months.
CMC foreign exchange dealer Tim Waterer said the Fed's leg up for the US economy had improved market optimism, causing a rally in some currencies, stock markets and the gold price.
"US Federal Reserve chairman Ben Bernanke is very much on the front foot with what was announced last night and that's why we've seen a flow on effect in Asian markets.
"There is a chance that it will be carried forward into the next several weeks, based largely on the fact that Bernanke over-delivered," he said.
Mr Waterer said he expected the Australian dollar to rise as high as 106.20 US cents during the offshore session on Friday night.
The University of Michigan September consumer sentiment survey will be released on Friday night.
"I don't think that'll have a big impact because that reading was taken before the Fed announcement," Mr Waterer said.
"So even if it is a poor reading that will largely be discarded, based on the fact that sentiment will be better now."
