At 12.00pm (AEDT), the dollar was trading at $US0.6544/50, up from Thursday's close of $US0.6537/41.
During the morning, the currency moved between $US0.6440 and $US0.6573.
The dollar started the local session near its intra-day low of $US0.6440 before news that US President Barack Obama's administration could emerge with a plan to ease the pains of homebuyers facing mortgage foreclosures, television reports said.
Once reports of a possible plan appeared, US equities recovered most of their intra-day losses in the last hour of trade.
The Dow Jones Industrial Average had fallen nearly 250 points in earlier trading, but staged a comeback to close down just 6.77 points, or 0.09 per cent lower.
The tech-heavy Nasdaq gained 0.73 per cent and the broad Standard & Poor's 500 index was up 0.17 per cent.
Societe Generale chief foreign exchange dealer, Paul Milton, said news of the US package lifted market sentiment and the Australian dollar rose in tow.
"In the last hour of New York, (the Australian dollar) recovered most of its overnight losses on the back of the Obama package to help the mortgage belt in the US,'' Mr Milton said.
"The Dow basically recovered around 250 points: it was down 250 and came back to flat on the news.
"The Aussie was basically bought on the back of that.''
Mr Milton said the local currency had been sold in Thursday's offshore session on increased doubts about the federal government's $42 billion fiscal package.
On Thursday, the South Australian independent senator Nick Xenophon voted with the coalition to reject the Nation Building and Jobs plan.
"There was quite a lot of negative sentiment over the last 24 hours ... doubt of the Rudd rescue package, and the uncertainty about that," he said.
The currency spiked, however, after reports this morning that Senator Xenophon had reached agreement with the government and would vote for the stimulus package.
Mr Milton said the dollar could test $US0.6600 during the rest of the Asian session.
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