The Australian dollar is half a US cent higher ahead of a crucial announcement on economic stimulus by the US central bank.
At 1700 AEDT on Wednesday, the local unit was trading at 105.32 US cents, up from 104.82 cents at Tuesday's close.
Since 0700, it has traded between 105.23 US cents and 105.41 cents.
Westpac chief currency strategist Robert Rennie said disappointing surveys of business and consumer sentiment over the last two days had failed to curb the Aussie dollar's strength.
"Despite that data, the Aussie continues to hold above 105 (US cents)," he said.
"I think that's driven by a sense that a Greek crisis has been averted, France and Germany look like they've overcome issues surrounding banking regulations, and we've had mixed sentiment around the US fiscal situation.
"But I think the biggest driver is the expectation that the Fed (US Federal Reserve) at the end of their meeting, will offer up a fresh round of quantitative easing."
The Westpac/Melbourne Institute Index of Consumer Sentiment fell back by 4.1 per cent to 100.0 in December, which showed that there were an equal number of optimists and pessimists about the economy among those surveyed.
This followed the NAB monthly business survey released on Tuesday, which revealed business confidence had slumped to its lowest level since April 2009.
The US Federal Reserve's Federal Open Markets Committee will conclude its meeting early on Thursday morning, Australian time.
At 1700 AEDT, the Australian dollar was at 87.04 Japanese yen, up from 86.28 yen on Tuesday, and at 81.01 euro cents, up from 80.88 euro cents.
Meanwhile, Australian bond futures prices were lower on Wednesday.
At 1630 AEDT on Wednesday, the December 10-year bond futures contract was at 96.855 (implying a yield of 3.145 per cent), down from 96.955 (3.045 per cent) on Tuesday.
The December three-year bond futures contract was trading at 97.320 (2.680 per cent), down from 97.395 (2.605 per cent).
UBS interest rate strategist Matthew Johnson said there had been little to push bond prices in either direction, ahead of the FOMC announcement.
"There was nothing to speak of in the (domestic) data today," he said.
"I think bonds took their lead from equity markets overnight and we've got the Fed tonight, so no-one wants to do much," he said.
Keep reading - next article