The dollar has hit a one week high, helped by optimism about the European economy and that a deal will be reached to keep Greece in the eurozone.

At 0700 AEDT on Wednesday, the local unit was trading at 78.21 US cents, up from 77.97 cents on Tuesday.

Early on Wednesday morning, it peaked at 78.30 US cents, the currency’s highest level since February 10.

Eurogroup head, Jeroen Dijsselbloem, has given Greece the rest of the week to request an extension to its bailout program that expires at the end of February, after talks broke down on Monday.

BK Asset Management, MD, Boris Schlossberg, said markets shrugged off the saga of Greece’s debt negotiations and focused instead on some positive economic data.

The German ZEW consumer confidence rose in February for the fourth consecutive month, which suggests that investors are feeling considerably more positive about the prospects for economic growth.

“The markets have assumed that some sort of deal will be struck and have decided to focus on the broader eurozone issues instead,” Schlossberg said. “As to Greece, it appears that the parties will continue their standoff until the last possible moment with the February 28 deadline looming as the final due date.”

On Tuesday, the Australian dollar rose above 78 US cents after the Reserve Bank minutes indicated that the RBA is in no rush to cut the cash rate again. Key economic data out on Wednesday include the Westpac-Melbourne Institute Leading Indexes of Economic Activity.

After that, the focus for markets will be on the release of the minutes of the US Federal Reserve’s January 27-28 policy meeting, due out early Thursday morning, Australian time.

AAP