The Australian dollar is higher, but trading in a tight range, following a decision by the US central bank to extend its economic stimulus program.
At 1700 AEDT on Thursday, the local unit was trading at 105.52 US cents, up from 105.32 cents at Wednesday's close.
Early on Thursday morning, Australian time, it peaked at 105.87 US cents, just before the US Federal Reserve announcement, its highest level since September 14.
CMC Markets foreign exchange dealer Tim Waterer said the Australian dollar rose to a three-month high in anticipation of the Fed announcement but the buoyant move was short lived.
"We saw a move higher by the Australian dollar and other currencies against a broadly-weaker greenback," he said.
"Last night, it looked like we could have reached 106 (US cents), but comments from (FOMC chairman Ben) Bernanke about the fiscal cliff doused some of that optimism."
At the conclusion of its meeting on Wednesday, the policy committee of the Fed said it planned to extend its debt-purchasing program, spending $US45 billion ($A42.95 billion) a month on long-term bonds, with the goal of keeping lending rates low, and stimulating spending.
However, it said it would no longer cover the cost of the purchases through the sale of short term debt.
Mr Waterer said the fiscal cliff - a series of tax rises and spending cuts due to begin in early 2013 - would remain the focus for markets towards the end of the year.
"It's difficult to gauge at this point in time, what might happen," he said.
"I think the market expects that something may be done, to avoid going over the fiscal cliff.
"But I think what has concerned the market is the comment from Bernanke that if the US does go over the cliff, the Fed can't offset the full impact."
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