Dollar higher after strong investment data

THE dollar rose above parity with the US dollar for the first time in two weeks, thanks some good US economic data and strong local business investment figures.

THE dollar rose above parity with the US dollar for the first time in two weeks, thanks some good US economic data and strong local business investment figures.

Since 7am (AEDT) today, the dollar traded as high as 100.84 US cents but fell to its intraday low at the end of the local session.

At 5pm (AEDT) today, the local unit was trading at 99.92 US cents, up from 99.68 cents yesterday.

The Australian currency started off the day above one US dollar after American economic data showed a recovery in consumer confidence in November.

The local dollar got a further boost after figures from the Australian Bureau of Statistics showed capital expenditure in the September quarter rose 12.3 per cent, which was above the eight per cent rise that the market expected.

CMC foreign exchange dealer Tim Waterer said the Australian dollar had quite a positive morning to mid-afternoon session.

"The strong capex figures certainly gave the currency a strong shot in the arm and moved it around a third of a US cent higher," he said.

"That capex number was quite considerably above expectations and that number is a good indicator, looking forward, to economic growth in future quarters."

Mr Waterer said the Australian dollar gave up a lot of its gains later in the afternoon as traders moved back into safe-haven assets ahead of what could be volatile European and US sessions overnight.

"There's a reluctance to push the currency to the 101 US cent mark at this stage, until we see what's on the table in Europe and the US.

"Economic data yesterday in the US includes November private payrolls, which is a key indicator of private sector employment growth.

Mr Waterer said markets would also focus on the escalating bond yields in Europe, which increased the cost of borrowing for governments.

The Reserve Bank of Australia's trade weighted index was at 74.6, up from 74.1 yesterday.