Dollar hovers around 105 US cents

THE Australian dollar rose during the overnight offshore session, moving back closer to 105 US cents.

Australian dollar

THE Australian dollar has opened higher, inching up towards 105 US cents during overseas trading.

At 0700 AEDT on Wednesday, the Australian dollar was trading at 104.97 US cents, up slightly from Tuesday's local close of 104.82 US cents.

During the overnight offshore session, the Australian dollar moved between a low of 104.72 US cents and a high of 105.12 US cents.

BNP Paribas currency strategist Vassili Serebriakov said the Australian dollar showed some resilience during US trading given a weak performance on Wall Street.

"The Aussie has held up quite well on what has been a negative day for equities," Mr Serebriakov said from New York.

US stocks were down about half a per cent heading into the close of trade, with investors cautious ahead of the upcoming company earnings season.

Aluminium maker Alcoa will be the first company to publish its quarterly results after the market closed on Tuesday (US time).

Mr Serebriakov said the Australian dollar was able to find support given its strong fundamentals, and investors' willingness to invest in risk assets at the start of 2013.

"I would still describe the market's overall bias in terms of what we are seeing as risk positive," he said.

"Not overwhelmingly so, but I think we have started the year looking on the positive side of market sentiment.

"Obviously currencies with either higher relative yields or with high exposure to high growth economies such as China typically benefit.

"Within the broadly risk positive start to the year it is probably not surprising to see the Aussie doing relatively well."

Mr Serebriakov said market players would focus on retail sales figures for November from the Australian Bureau of Statistics due out at 1130 AEDT.

New home sales data from the Housing Industry Association are also due for release.