$AUD Stronger on the back of $USD weakness

At 7am (AEDT), the local unit was trading at US74.09¢, above Tuesday's close of US73.77¢. Overnight it reached a low of US73.39¢ and a high of US74.11¢.

Westpac's senior currency strategist in New York, Richard Franulovich, said the Australian dollar pushed higher overnight as the US dollar fell across the board.

A weaker than expected US manufacturing report drove the initial move lower in the US currency.

This was extended after the release of the minutes from the Federal Open Market Committee's (FOMC) December meeting, which were seen as signaling the Fed's campaign of interest rate rises is coming to an end.

"I don't think the minutes actually said anything new but they kept alive the hope that the Fed is nearing the end of its tightening cycle," Mr Franulovich said.

"The Aussie initially refused to rally but as the US dollar weakness became more entrenched, it finally rallied," he said.

The Institute for Supply Management's index of national factory activity declined to 54.2 in December, down from 58.1 in November and below the market forecast.

The minutes from the Federal Open Market Committee's (FOMC) December 13 meeting, at which it raised interest rates by a quarter per cent to 4.25 per cent, showed the FOMC judged that "some further measured policy firming" would likely be needed.

While future action would depend on incoming data, most members believed that given the information now in hand, "the number of additional firming steps required probably would not be large".