At 12.00pm (AEST), the dollar was trading at $US0.8405/08, up from yesterday's close of $US0.8274/77.
Since 7.00am, the unit has moved between $US0.8382 and $US0.8414.
Nomura Australia chief economist Stephen Roberts said the domestic unit had found early support from US equity markets, but climbed above US84 cents following media commentary that the Reserve Bank of Australia (RBA) would lift interest rates before the end of the year.
"We had a recovery in US equity markets late in their session,'' he said.
"Risk assets are in favour.
"Part of that is driven by The Australian Financial Review (AFR) commentary that there is a potential (for a) rate hike in October.''
US stocks closed at a fresh high for 2009.
The Dow Jones Industrial Average added 37.11 points, or 0.39 per cent, to 9580.63, its eighth consecutive increase.
The tech-heavy Nasdaq composite rose 3.3 points, or 0.16 per cent, to 2027.73 and the Standard & Poor's 500 index gained 2.86 points, or 0.28 per cent, to 1030.98.
The news bolstered risk appetite and pushed the unit to open the domestic session at $US0.8390/96.
But the unit reached its intra day high after investors digested the article by a noted watcher of the central bank in the Fairfax publication.
The commentary noted that the RBA might not wait for October's economic data before boosting the overnight cash rate from its current 3 per cent.
"For the time being, it's helping keep things very well supported,'' Mr Roberts said.
"It's helping it maintain strength above US84.00, but I'm not sure the sentiment is going to last.''
The debt futures market has fully priced in an interest rate rise in November.
The RBA's trade weighted index (TWI) was at 66.3, up from yesterday's close of 65.5.
Meanwhile, the Australian bond market was weaker. The yield on the Commonwealth Government March 2019 bond was at 5.393 per cent, up from yesterday's close of 5.296 per cent, while the yield on the April 2012 bond was at 4.906 per cent, up from 4.732 per cent previously.
On the Sydney Futures Exchange, the September 10-year bond futures contract price was 94.620, down from yesterday's close of 94.720, while the September three-year bond futures contract was at 94.990, down from 95.160 previously.
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