The Australian dollar rose sharply today on hopes the United States and China will take more action to boost their economies, and that a German court will back the eurozone's bail out fund.

The Aussie powered up to a three-week high of $US1.0491, driven by stop-loss buying as resistance gave way. It was recently trading at $US1.0475, and also buying 81.6 yen and 81.4 euro cents.

Reports that Spain's Prime Minister was considering asking for EU aid also gave a boost to risk sentiment.

"Markets are running higher on 'hopium'," said David Scutt, a trader at Arab Bank Australia.