My site is currently hosted in Australia and doing extremely well. But we are trying to build our American market and finding it hard.

Is it true that if we host the domain in the United States that we will naturally get more traffic? If Im hosting in Australia would my site be excluded from a lot of searches in the US?

Any help with this greatly appreciated

If you host the domain and set up a local office in the USA your business may do better--especially if you use a domain that's a .com rather than a .com.au. People in the USA tend to be more likely to purchase something from a .com site rather than a .com.au site.

When it comes to the search engines, though, you won't get any preferential treatment per se just because you set up a .com and host it in the USA. You'll need to promote it just like any other website.