The Australian dollar gained yesterday after US politicians agreed on a range of measures designed to avert sweeping tax hikes and about $US110 billion ($105bn) in spending cuts, known as the fiscal cliff.
The agreement boosted sentiment among investors and meant that traders unwound some of their positions in the US dollar, the world's main reserve currency, opting instead to buy currencies such as the euro and the Australian dollar.
At 5pm AEDT, the Australian dollar was trading at $US1.0473, up US0.9c.
Strategists said the US fiscal agreement could push the Aussie back above $US1.05 as traders unwound safe-haven bets on the US dollar.
"The Aussie dollar is going to be well supported," said Andrew Salter, a strategist at ANZ Bank in Sydney.
"Anything that's good for the global economy is good for the Aussie dollar."
The local currency largely ignored soft local data that showed house prices were weaker last month, damping expectations of a recovery in the property sector this year and showing that aggressive interest rate cuts over the past year had done little to spur demand.
The RP Data-Rismark December Hedonic Daily Home Value Index fell 0.3 per cent last month from November, despite a rate cut at the start of the month.
