Dollar stays above 101 US cents

THE dollar was stronger at noon today, on the back of stronger commodity prices and equity markets.

THE dollar was stronger at noon today, on the back of stronger commodity prices and equity markets.

At 12.00pm (AEDT), the local unit was trading at 101.17 US cents, up from 100.32 cents on Tuesday.

Since 7.00am (AEDT), the local dollar traded between 101.03 US cents and 101.20 cents.

The Australian dollar broke parity with the greenback yesterday, after the the Reserve Bank of Australia (RBA) left the cash rate at 4.75 per cent.

It continued to rise overnight as commodity pries and US equities strengthened.

CMC Markets foreign exchange dealer Tim Waterer said everything had gone right for the local unit to rise above the 101.00 US cent mark.

"It's been nothing short of a stellar 24 hours for the Australian dollar," he said.

"The sea of green numbers on the equity markets has done wonders for the local currency.

"We saw a surprise jump after the RBA announcement yesterday, and that was followed by pretty solid US numbers overnight, (and) a subsiding of fears concerning the Middle East, which encouraged risk trade to resume.

"That's seen the Aussie and the euro skyrocket in the offshore session."

Mr Waterer said the Australian dollar had come off its overnight highs due to some profit taking by currency traders early in the Asian session.

"It's not entirely unexpected after a move like we saw last night," he said.

US private payrolls data for January will be released tonight (AEDT) and US non-farm payrolls will be out on Friday night.

"It's not always the best indicator of the broader number on Friday, but certainly it will cause a reaction in the market," Mr Waterer said.

He said any positive employment data from the US would provide a short-term boost for the US dollar, but in the medium to long term would help riskier assets such as the Australian dollar.

He expected the local unit to trade in a range between 100.80 US cents and 101.50 cents this afternoon.