The Australian dollar hit a one-week high after European Central Bank (ECB) president Mario Draghi vowed to preserve the euro.
At 1700 AEST on Friday, the local unit was trading at 104.26 US cents, up from 103.39 cents on Thursday.
During the local session on Friday, the Australian peaked at 104.42 cents, its highest level since July 19.
On Thursday night (AEST), Dr Draghi told a business summit in London, the ECB would do "whatever it takes to preserve the euro. And believe me it will be enough".
CMC Markets foreign exchange dealer Tim Waterer said the staunch defence of the euro gave financial markets a much-needed pick me up.
"The Australian dollar tracked a path similar to that of global equity markets as traders took comfort from events in Europe," Mr Waterer said.
"If the better sentiment can find some legs into next week then 105.20 US cents starts looking like a short term target."
Immediately after the ECB president's bullish remarks, the euro soared two US cents and peaked at a three-week high of 123.30 US cents.
"The euro was launched at a near 90 degree angle against the US dollar after the ECB president sounded resolute in his remarks," Mr Waterer said.
The US will release its June quarter gross domestic product figures on Friday night, Australian time.
Mr Waterer said the data would be the key factor as to whether the Australian dollar could continue its momentum.
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