THE Australian dollar is close to US106c after touching a near four-month high in offshore trading on the back of a stronger gold price.
At 7am AEDT today, the Australian dollar was at US105.95c, about half a US cent higher from yesterday's local close of US105.49c.
During the overnight session, the Australian dollar reached US105.99c, its highest level since September 14, 2012, when the currency touched US106.24c.
The local currency's latest surge began yesterday (AEDT) when the Australian dollar rose about half a US cent after China posted a larger-than-expected trade surplus for December.
There was further positive news for the Australian dollar in the offshore session, as Wall Street rallied and futures contract prices for gold gained 1.4 per cent to $US1678 per fine ounce.
The currency was also boosted by comments from ECB president Mario Draghi after the central bank meeting overnight.
He said recent signs suggested the situation in Europe had broadly stabilised and financial market confidence had improved significantly.
"The Australian dollar has done extremely well during the North American session," BK Asset Management managing director Kathy Lien said from New York.
"With ECB president Draghi pretty much saying that the ECB's debt crisis is in the rear view mirror, we are seeing all of the risk assets, including the Aussie, rally."
A more positive global picture, as well as encouraging data from China, also increases the chance that the Reserve Bank of Australia (RBA) will leave the cash rate on hold at its February board meeting.
Ms Lien said the focus for currency markets during today's Asian session would be on the release of Chinese inflation data for December.
"That's going to play a big role in how the Aussie trades," Ms Lien said.