Dollar over one US cent higher

THE Australian dollar is more than one US cent higher as hopes grow that European countries will support their banks to prevent the eurozone debt crisis spreading.

THE Australian dollar is more than one US cent higher as hopes grow that European countries will support their banks to prevent the eurozone debt crisis spreading.

At 6.30am (AEDT) this morning, the local unit was trading at 96.38 US cents, up from 95.50 cents yesterday.

German Chancellor Angela Merkel made comments backing the recapitalisation of banks, which confirmed reports that the European Union was working on such a plan to deal with the crisis.

"I think it is justified, if we have a joint approach," Chancellor Merkel said.