At 12pm (AEDT), the dollar was trading at $US0.6876/79, up nearly 2 per cent from yesterday's close of $US0.6746/48.
Since 7am, the unit has moved between $US0.6846 and $US0.6893.
Yesterday the US Federal Reserve announced plans to buy up to $US300 billion ($441 billion) in long dated US Treasury bonds over the next six months "to help improve conditions in private credit markets."
The central bank also said it would increase its buying of mortgage-backed securities by $US750 billion ($1.1 trillion), bringing its total purchases of these securities to about $US1.25 trillion ($1.8 trillion) ($1.84 trillion) this year.
ANZ head of foreign exchange and international economic research, Amy Auster, said the Australian dollar was benefiting from a change in market sentiment after the US Fed's decision.
"It is based on a broader move on the currency markets," Ms Auster said from Melbourne.
"The currency markets are adjusting to the big shift being introduced by the Federal Reserve in the Fed buying treasuries.
"Currencies are finding a new trading range, and that is probably going to find some time for everybody to sort out how far this can run."
Ms Auster said the Australian dollar broke through some key levels during Thursday's offshore session, particularly above $US0.6920, before retreating a little during local trade.
The local currency touched an overnight high of $US0.6943 and had the strongest start to the local trading day at 7am (AEDT) since January 12.
"We did fall away, but we have been fairly steady this morning," she said. "We are seeing mainly buying interest out of Asia."
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