The Australian currency traded near a two year high at Monday noon on rising equities in the region and a weaker greenback, but had drifted lower this morning's high as it consolidated.

At midday east-coast time, the domestic dollar was buying 95.89 US cents, up almost 1 US cent from Friday's local finish of 94.94 cents. It was also changing hands at 80.83 yen, 71.21 euro cents and 60.58 pence.

The local unit earlier reached 94.24 cents, the highest since July 2008. Since 7am, the Australian dollar's low was 95.49 US cents.

Moves across all major currencies on Friday night were ''quite large' so "we do expect a period of consolidation following that," Commonwealth Bank chief currency strategist Richard Grace said.

''There's been a little bit of US dollar recovery, the Aussie has come off a bit, but not significantly.''

New York's Dow Jones index lifted nearly 2 per cent to end the week as economic data continued to signal the prospect of a double-dip recession in the US is weakening.

Asian equity markets improved, with Japan's Nikkei 225 index 1.4 per cent higher, Hong Kong's Hang Seng index up 1.1 per cent and the Shanghai Composite index putting in half a per cent.

Mr Grace said the US dollar declined quite significantly during the offshore session.

''It wasn't just the equity movements, it was some sort of further unwinding of the risk aversion theme that continues to exist in the market for participants who think the US may enter into a double dip recession.

''Traders are selling off the US dollar and also US investors are putting money offshore. There's a lot of international portfolio management done out of the US, so when equity markets do go up, they sell the US dollar.''

He predicts the Aussie would drift ''a bit lower'' in afternoon trade, in the absence of any local economic data.

But the Aussie dollar's high-yield appeal was clearly working in its advantage, with Australian-US yield spread at multi-month highs and growing speculation the Reserve Bank of Australia may lift domestic rates as soon as next week.