Despite the failure of European leaders to agree to a crucial Greek debt deal this week, Australia's sharemarket still recovered most of last week's losses.
It is now trading back above 4400 points, helped by evidence that US and Chinese growth has picked up.
Meanwhile, the Australian dollar made headlines after the International Monetary Fund said it was thinking about giving the currency a higher profile in central banks' reserve data.
For the week, the benchmark S&P/ASX 200 rose 76.2 points, or 1.7 per cent, to 4413 points, while the broader All Ords gained 71.4 points, or 1.6 per cent, to 4431.5.
The IMF said the Australian dollar might soon be listed as its own entity in central bank holdings, joining a group of reserve currencies that include the US dollar, euro, yen, pound and Swiss franc.
The Reserve Bank governor, Glenn Stevens, said such a move would represent no more than a "classification change" and would have little material effect.
But it still got people talking about the strength of the Australian dollar, which is one of the top five most traded currencies in the world.
In the past three weeks the dollar has been trading between US102.87? and US104.80?. Currency strategists said its emerging status as a "reserve currency" could explain why it has been trading within such a tight range.
"There's a theory going around that the presence of central banks in the market basically 'top and tail' any big price movements in the Australian dollar," ANZ's foreign exchange strategist, Andrew Salter, said.
"The Aussie has been an increasing part of central bank portfolios, that's one of the big stories of 2012, and when central banks add it to their portfolios they have to rebalance their portfolios on a daily or weekly basis to keep the value of their portfolios within the risk limits that are dictated by their mandate."
That means if the Australian dollar appreciates then the value of Australian dollars in central bank portfolios goes up, and in order to bring it back within acceptable limits they have to sell Australian dollars. So if the Australian dollar goes up they sell, and if the Australian dollar goes down they buy, so it compresses the price action. So it's an interesting and developing thing that's happening."
Meanwhile, energy stocks were lower on the sharemarket on Friday, with Santos falling 11? to $10.94.
Beach Energy shares fell 3.5? to $1.40, after the oil and gas producer said its Cooper Basin operations were going well as it ramped up its $400 million growth phase.
Leighton Holdings fell 20? to $16.88 after its former finance manager pleaded guilty to stealing more than $20 million from one of Australia's largest construction and infrastructure companies.
David Jones slipped 1? to $2.43, as the outgoing chairman, Bob Savage, said recent interest rate cuts had yet to work their magic on consumers and get them spending again.
The residential property and housing developer AV Jennings said it would put more new homes on the market in response to what chief executive Peter Summers said were signs of improvement after a difficult year. It last traded at 30?.