The Australian dollar has risen to a three-month high, helped by easing tensions between Russia and the West and a stable local interest rate outlook.

Early Wednesday, the Australian currency was trading at 91.27 US cents, up from 90.78 cents on Tuesday.

Earlier in trading it peaked at 91.38 US cents, its highest level since December 11.

Russian president Vladimir Putin has signed a treaty making Crimea part of Russia after a weekend referendum that Western nations describe as illegal.

OM Financial senior client adviser Stuart Ive said Russian president Vladimir Putin’s address gave investors reason to be optimistic.

“Although being a fairly defiant president he did say there would not be any further break-up of the Ukraine,” Ive said.

“The market took this as a signal that this was an isolated event.”

Ive said the release of the minutes of the Reserve Bank of Australia’s March board meeting was also helping support the Australian dollar.

The RBA reiterated its stance that the cash rate will stay at its current level of 2.5 per cent “for some time” and appeared to be more optimistic about the Australian economy.

“There was an upbeat tone to the RBA minutes,” Ive said.

“Growth in Australia, although not running away, is hopefully turning.”

Ive said traders were now waiting for an announcement from the US Federal Reserve after its two-day policy meeting finishes early on Thursday morning, Australian time.

The Fed is likely to give some guidance on how quickly it will wind back its economic stimulus program now that the US economy looks to be getting stronger.

Ive said he expects the Australian dollar to trade in a range between 90.90 and 91.50 cents on Wednesday.