An index for emerging market currencies rose to its highest level since June 2018 while the Chinese currency in the offshore market rose 0.2% to 6.8636 yuan per dollar, its strongest level since July 2019.
"The Chinese data overnight offered some cause for optimism with the Phase 1 trade deal with the US partially lifting the cloud of uncertainty hanging over the economy," said Craig Erlam, senior market analyst at OANDA.
The Aussie is often traded as a liquid proxy for the Chinese yuan as the country's small, open economy is heavily reliant on exports to China.
The local dollar and its New Zealand counterpart rose 0.2% against the dollar respectively.
But despite gains by emerging market currencies, the dollar held its ground against its rivals and was on track for a small weekly loss, with the dollar index tracking its strength against six of its major peers little changed at 97.31.
Recent data has been mildly supportive of the greenback.
US retail sales increased for a third straight month in December, and the number of Americans filing claims for unemployment benefits dropped for a fifth straight week last week, showing that the labour market remained strong.
Elsewhere, the British pound weakened 0.2% at $1.3050 after worse-than-expected December retail sales.