The Australian dollar hit its strongest against a broadly weaker greenback in more than two years on Wednesday as traders cited Asian demand for the Australian currency pushing it higher.

At 1700 AEST, the local unit was buying at 97.03 US cents, up 1.31 cents from Tuesday's finish of 95.72 cents.

Trading between between 96.59 cents and 97.03 cents on Wednesday, it has reached its highest value since July 2008.

Reserve Bank of Australia board member Jillian Broadbent said growth in China would translate to growth in Australia in 2011.

China is the biggest buyer of Australia's commodity exports and surging Chinese demand has been one of the key reasons for Australia's strong economic performance. Hence, good Chinese data tends to bode well for the Aussie.

RBC Capital Markets senior economist Su-Lin Ong said Ms Broadbent's upbeat comments helped prop up the domestic currency.

"She was fairly positive on the outlook for China and Australia, and that gave the Aussie a bit of a lift," Ms Ong said.

Meanwhile, the greenback continued to weaken against other currencies yesterday after a handful of reports highlighted fears about the waning American economy.

A survey on consumer confidence found that Americans were increasingly downbeat about the economy.

Another report on the outlook of CEOs at major US companies showed top business executives remain cautious and were increasingly possibly trim hiring plans.

"The data were all informally weak so that did weigh on the US dollar," Ms Ong said.

Financial markets are pricing in about a 60 per cent chance of a 25-basis-points hike in the official cash when the RBA board meets on October 5

The central bank has held the cash rate at 4.5 per cent since it took it there from 4.25 per cent in May. Since October, the RBA lifted the cash rate from 3 per cent in six quarter of a per cent increments.

"Whether they move next week or the month after, I think is a bit irrelevant," Ms Ong said.

"At the end of the day, the rate differential continues to move in favour of the Aussie dollar, so I think all the stars are clearly lined up for the Aussie and that's why it's moving towards these levels."