Dollar rises on strong GDP and euro zone hopes

THE Australian dollar rose today after the publication of strong economic growth data.

THE Australian dollar rose today after the publication of strong economic growth data.

Expectations that euro zone leaders could be close to reaching a resolution to their debt crisis also boosted the local currency.

At 5pm AEDT, the Australian dollar was trading at 102.68 US cents, up from 101.81 cents yesterday.

The local currency lifted following the publication of gross domestic product (GDP) data showing one per cent growth for the September quarter, for a 12-month rate of 2.5 per cent.

At noon today, the currency was trading at 102.72 US cents, up from 102.44 cents just before the data was released.

Commonwealth Bank chief currency strategist Richard Grace said the Australian dollar had been supported by favourable conditions throughout the day.

"It's been reasonably strong all day," he said.

"Mainly because we've had good support in Asian equity markets as well as those better than expected GDP figures, including the upward revisions of the previous quarter.

"The Aussie is up on the cross-rate for the euro, sterling and yen and there seems to be a theme of a softer US dollar trickling through the market as well, which has lent its support."

Mr Grace said there could be a tighter range going into overnight trading but that the Aussie dollar had strong potential later in the week, in anticipation of a crucial meeting of eurozone leaders.

"(Tight trading) seems to be the pattern over the last few days - the ranges have been quite narrow.

"I expect that trend will continue," he said.

"I think the dollar may find some further support as the week progresses.

"There seems to be some relief that the European authorities seem to be doing something concrete in terms of dealing with the issues, and it's a step in the right direction even if more could be done."

Eurozone leaders are to meet in Brussels, Belgium, tomorrow to broker a deal on the region's debt crisis.

Today, the RBA's trade weighted index was at 76.0, up from 75.4 yesterday.