The Australian dollar is higher as strong business and consumer sentiment surveys drive optimism about the local economy.

At 0700 AEST on Thursday, the local unit was trading at 93.28 US cents, up from 92.90 cents on Wednesday.

The Australian dollar has reached three-month highs amid increasing optimism about the local and Chinese economy, driven by a stream of stronger than expected figures and surveys.

Surveys released in Australia this week have shown surges in business and consumer confidence while industrial production and retail sales figures from China came in strong.

BK Asset Management MD, Kathy Lien, said these factors, along with the reduced likelihood of a US military strike on Syria, were boosting the Aussie dollar.

“In the North American session, we’ve just been seeing additional profit taking on US dollar positions,” Lien said.

“As the tensions in Syria continue to recede, we’ve seen the US dollar continue to lose its safe haven bid.

“Locally, there’s optimism that the uptick in business and consumer confidence means the labour market in Australia has probably improved a bit and I think that’s also providing a bit of underlying support in the Aussie dollar.

“Given we don’t have too much US data this week, the Chinese data has been providing a bit of overall risk appetite across the financial markets and the Aussie is benefiting from that as well.”

AAP