Australian dollar higher after ECB rate cut

THE Australian dollar is almost two US cents higher after the European Central Bank (ECB) cut its interest rate by a quarter of a percentage point.

THE Australian dollar is almost two US cents higher after the European Central Bank (ECB) cut its interest rate by a quarter of a percentage point.

Another factor that helped market optimism was Greek Prime Minister George Papandreou's indication he was ready to drop plans to hold a referendum to approve a bailout package.

The announcement of a referendum earlier this week sent shockwaves through markets and renewed fears that Greece could default on its debt.

At 0630 AEDT today, the Australian dollar was trading at 104.33 US cents, up from 102.48 cents yesterday.