$A gets a boost from Fed announcement
Market watch top headlines
The Australian dollar has surged to its highest level in a month after the US Federal Reserve announced a renewed program to give the flagging American economy a boost.
The US central bank will spend $US40 billion ($A38 billion) to buy mortgage-backed securities for as long as it takes to reduce the unemployment rate.
The move is aimed at dragging down long-term interest rates for lenders to encourage more borrowing.
At 1700 AEST on Friday, the local unit was trading at 105.85 US cents, up from 104.52 cents on Thursday.
During local trade on Friday, the Australian currency peaked at 105.91 US cents, its highest level since August 9.
The euro also surged against the US dollar, going as high as 130.54 US cents, its strongest level in four months.
CMC foreign exchange dealer Tim Waterer said the Fed's leg up for the US economy had improved market optimism, causing a rally in some currencies, stock markets and the gold price.
"US Federal Reserve chairman Ben Bernanke is very much on the front foot with what was announced last night and that's why we've seen a flow on effect in Asian markets.
"There is a chance that it will be carried forward into the next several weeks, based largely on the fact that Bernanke over-delivered," he said.
Mr Waterer said he expected the Australian dollar to rise as high as 106.20 US cents during the offshore session on Friday night.
At 1700 AEST, the Australian dollar was at 82.15 Japanese yen, up from Thursday's close of 81.23 yen, and at 81.11 euro cents, up from 80.94 euro cents.
Meanwhile, Australian bond futures prices were lower.
Westpac senior market strategist Damien McColough said the Fed announcement improved market sentiment and gave investors a further reason to buy riskier assets.
He said safe-haven assets like Australian bonds had a pretty weak day.
"I guess that's probably in the context of the broader global drivers of markets over the last three weeks and over the last 24 hours is not surprising," he said.
At 1630 AEST on Friday, the September 10-year bond futures contract was trading at 96.805 (implying a yield of 3.195 per cent), down from 96.865 (3.135 per cent).
The September three-year bond futures contract was at 97.300 (2.700 per cent), down from 97.385 (2.615 per cent).