Australian shares have bounced back strongly after several negative sessions, but the Aussie dollar remains in the doldrums near a one-month low on the risk of the Reserve Bank easing monetary policy further.

The S&P/ASX200 benchmark index was up 110.6 points, or 1.9 per cent, at 5894.7 points at 1200 AEST on Wednesday.

The All Ordinaries index rose 112.1 points, or 1.9 per cent, to 6085.6.

The market got a much-needed boost from Wall Street overnight after tumbling to three-month lows in recent days on global worries over the second wave COVID-19 pandemic and in the run-up to US presidential election.

The US received a major lift from a 5.7 per cent jump in Amazon shares after an upgrade from a broking housing, and despite the US COVID-19 death toll breaching 200,000.

The Dow Jones Industrial Average rose 140.48 points, or 0.52 per cent, to 27,288.18. The S&P 500 gained 34.51 points, or 1.05 per cent, to 3,315.57 and the Nasdaq Composite added 184.84 points, or 1.71 per cent, to 10,963.64.

Local shares were a sea of green across all sectors.

BHP was up 1.2 per cent at $37.12 and Rio Tinto rose 1.1 per cent at $98.02.

Among the big four banks, Commonwealth was 2.1 per cent higher at $64.42, ANZ rose 2 per cent to $16.79, NAB was up 2.5 per cent to $17.06 and Westpac increased 2.0 per cent to $16.37.

Elsewhere, Qantas was 2.9 per cent higher at $3.88 after the airline announced it is ending its 30-year sponsorship with Rugby Australia after a review of its major sporting sponsorship deals.

The Aussie dollar tumbled to its lowest level since early August at 71.28 US cents, breaching anticipated support at 71.50 US cents in morning trade.

By midday it was 71.43 cents US cents compared with $72.14 US cents late on Tuesday.

The currency has been on the backfoot since a speech by deputy Reserve Bank governor Guy Debelle on Tuesday indicated the central bank is ready to use a suite of measures to support the economy if needed.

This included cutting the cash rate, the three-year bond yield target and the term funding facility rate, raising speculation of a reduction to 0.10 per cent from 0.25 per cent.

He also signalled the central bank may purchase bonds with longer maturities than the three-year issues it buys now to keep market interest rate low.

Investsmart market strategist Evan Lucas said it sets up a “double whammy” for October 6 when the Reserve Bank holds its next board meeting, just hours before Treasurer Josh Frydenberg hands down his delayed 2020/21 budget.

Interest rate futures are implying a cash rate of just 0.075 per cent.

Meanwhile, retail spending fell across the nation in August, with Victoria recording a massive 12.6 per cent drop as the state’s COVID-19 restrictions hit non-essential retail businesses.

Australian Bureau of Statistics preliminary retail trade figures for the month showed national turnover fell by 4.2 per cent compared to July.

Outside of Victoria, retail activity fell 1.5 per cent.

At the same time, demand for workers grew nationally for a fourth month in a row but declined again in Victoria.

Department of Education, Skills and Employment data showed jobs ads posted on the internet in August rose 1.3 per cent but were still down 19.5 per cent compared with a year earlier.

All jurisdictions , except Victoria, recorded gains in recruitment activity during the month. In Victoria, jobs fell by 7.5 per cent – its second monthly decline.