The Australian dollar was buying 91.13 U.S. cents, 44 British pence, 104 Japanese yen and 63 euro cents.

Both market indicators climbed more than 1 percent -- the All Ordinaries Index closing 71 points higher at 6,700 and the ASX 200 up 76 points at 6,716.

In the mining sector, Rio Tinto went up 2.5 percent to $97.73 and BHP Billiton rose 2 percent to $41.79.

Oil prices entered record territory fetching $90.98 a barrel and pushed Woodside petroleum shares up 2.4 percent.

Australia's national airline, Qantas, gained 5 points to close at $5.48 after announcing a review of its fuel surcharge on ticket prices.

Gold prices also soared to a 28-year high, hitting $776 and helping the biggest producer, Newcrest, gain a whopping 7.3 percent to close at $28.53.