The Australian dollar has rallied above 93 US cents following a sharp US dollar sell off overnight.

At 0700 AEST on Wednesday, the local currency was trading at 93.48 US cents, up from 92.94 cents on Tuesday.

The Australian dollar got a momentary boost on Tuesday from the Reserve Bank of Australia’s monthly board meeting statement, in which it was more optimistic about unemployment and less concerned about the high Australian dollar.

The currency then rallied to a two week high of 93.69 US cents overnight following a sharp sell off of the US dollar.

Arab Bank treasury dealer David Scutt said the local currency had pushed aside soft trade figures and other weak economic reports.

“The Australian dollar/US dollar has leapt higher overnight with US dollar weakness before US Federal Reserve chair Janet Yellen’s testimony this evening,” Scutt said.

Yellen will testify before the US joint economic committee of congress on the outlook for the economy.

Scutt said all eyes on Wednesday would be on Australian retail sales figures.

Despite that data being a “high volatility event”, the local currency should remain above 93 US cents on Wednesday, he said.

“It’s likely that the Aussie will remain well supported over the course of Asian trade,” he said.

AAP