The Australian dollar has surged to a two-week high, continuing its underdog rally, but the unexpected gains in the currency may not be over, says Saxo Bank chief economist Steen Jakobsen.

The Aussie pushed above US72¢ on Friday, on track for a weekly 1 per cent gain, despite another slip in the iron ore price and rising expectations the US Federal Reserve will finally start lifting interest rates at its meeting next month.