At 12.00pm AEDT, the Australian dollar was trading at $US0.6657/61, up from Friday's close of $US0.6568/76.
During the morning, the local unit traded between a low of $US0.6612 and a high of $US0.6694.
The dollar opened stronger at $US0.6629/37 at 0700 AEDT following weekend offshore trading.
The local currency rose after the White House said it would "consider'' using money set aside for the rescue of Wall Street financial firms to help Detroit's big three automakers - General Motors, Ford and Chrysler, after the US Senate failed to pass a rescue package.
The dollar's climb continued at the start of the local trading day, with the currency buoyed by increasing US dollar weakness and a bright start on local equity markets, which are up 3.5 per cent.
ANZ Banking Group senior currency strategist Tony Morriss said the euro-US dollar cross breaking above $US1.34 had helped the local currency.
"There's a weak US dollar story there,'' Mr Morriss said.
"After the moves that we've seen in recent months maybe there was some scope for the Aussie to rebound.''
Mr Morriss said he expected the US dollar to remain under pressure ahead of the Federal Open Market Committee (FOMC) meeting and interest rate decision due on Wednesday morning (AEDT).
"The yields in the US have been falling and the numbers have been awful so going into FOMC, the US dollar is going to be weak,'' Mr Morriss said.
"There's a lot of economic weakness yet to play out in the US.''
Mr Morriss said the Australian dollar could reach $US0.7000 over the next couple of weeks if the euro reached $US1.37.
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