Dollar soars after Slovaks reschedule vote

THE Australian dollar rose to three-week highs overnight as approval of a European bailout fund looks more likely.

THE Australian dollar rose to three-week highs overnight as approval of a European bailout fund looks more likely and after some negative comments about the US economy by its central bank.

The euro also hit a three-week high against the US dollar.

At 7.00am (AEDT) today, the Australian dollar was trading at 101.60 US cents, more than two US cents up from 99.42 cents yesterday.

Since 5.00pm (AEDT) yesterday, the local unit has traded between 99.34 US cents and 102.04 cents.

Four Slovak political parties agreed on overnight (AEDT) to hold a second vote to approve the changes to the European bailout fund later this week, after an initial vote failed.

The turnaround came following pressure from other European nations and a warning from European Central Bank chief Jean-Claude Trichet that the world financial system faces systemic dangers.

Sixteen countries have already approved the changes, but under the eurozone's rules all 17 Eurozone nations need to vote in favour to increasing the size and powers of the bailout fund.

The minutes of the US Federal Reserve's Federal Open Market Committee (FOMC) September 20-21 meeting were released, showing that officials were gloomy about the US economy's outlook.

"Participants saw considerable uncertainty surrounding the outlook for a gradual pickup in economic growth," the minutes said.

ANZ Banking Group senior dealer Alex Sinton said the European news was supportive of the Australian dollar and the FOMC minutes were not supportive of the US dollar.

"It's primarily the rescheduling of the vote in Slovakia and a weaker US dollar," he said from Auckland.

"If you look at the FOMC meeting and the comments were not very supportive as far as the US economy goes.

"Equities are pulling back slightly but are still reasonably positive."

Today, the Australian Bureau of Statistics releases employment data for September.

The figures are expected to show 10,000 jobs were added to the economy in September and the unemployment rate remaining at 5.3 per cent, according to an AAP survey of 15 economists.

Mr Sinton said the Australian employment data had been disappointing in the past few months and added that the Australian dollar could fall after the figures are released at 11.30am (AEDT).

He said he expected the Australian dollar to trade in a range between 101.15 US cents and 102.10 cents on today.