Dollar higher as shares, commodities rise

THE Australian dollar was stronger today after a buoyant night on European and US equity markets and as commodities also pushed higher.

THE Australian dollar was stronger today after a buoyant night on European and US equity markets and as commodities also pushed higher.

At 0710 AEST today, the Australian dollar was trading at 105.03 US cents, up from 104.16 US cents yesterday.

Since 1700 AEST yesterday, the local unit traded between 103.85 US cents and 105.14 US cents.

It hit a peak of 110.81 US cents on July 27, its highest level since the fixed exchange rate era ended with its float in December 1983

HiFX senior trader Stuart Ive said the Australian dollar had outperformed overnight as equity markets and commodities, including oil, gold and copper, all tracked higher.

"There is a little bit of stability coming into the market to a certain degree," Mr Ive said.

Wall Street got off to a strong start on a series of major takeover deals, boosting European markets, after Asian markets moved ahead sharply on figures that showed the Japanese economy is doing better than expected.

Also overnight, the European Central Bank revealed it spent 22 billion euros ($A30.44 billion) last week - more than it has ever done before - to prop up the bond markets of Italy and Spain.

"From the market's point of view, it says they are not just standing back, they are actually saying, 'Ok, we need to stabilise the situation'," Mr Ive said.

In economics news today, the Reserve Bank of Australia (RBA) releases the minutes of its August board meeting, at 1130 AEST.

Mr Ive said the minutes were a bit "historical" now, because of the drama that had unfolded on financial markets since the August meeting.

"I think the minutes will be viewed relatively neutrally, on the basis that the market has gone through two weeks of extreme turmoil since the RBA meeting," he said.

Mr Ive expected the Australian dollar was expected to trade between 104.50 US cents and 105.20 US cents during the domestic session today.