The Australian dollar has surged ahead and broken through 109 US cents level, for the first time in three months.

Just before 1300 AEST, the local unit climbed to 109.02 US cents, its highest level since May 3.

Deutsche Bank foreign exchange strategist John Horner said traders were dumping US dollars and investing in currencies like the Australian dollar because President Barack Obama failed to provide any new details on possible solutions to the debt ceiling negotiations.

On Tuesday morning, traders had been awaiting a speech from Mr Obama, hoping he would reveal progress in the negotiations with Republican law makers.

“The Obama speech didn’t deliver any progress on moves towards a resolution of the debt-ceiling issue,” Mr Horner said.

The domestic currency reached 110.11 US cents on May 3, a record high since the currency was floated in December 1983.

AAP