Dollar rises, traders await key EU summit

THE Australian dollar rose almost one US cent as traders position themselves in preparation for the weekend's crucial eurozone summit.

THE Australian dollar rose almost one US cent as traders position themselves in preparation for the weekend's crucial eurozone summit.

Overnight, Greek members of parliament passed a deeply resented austerity bill that has led to violent protests on the streets of Athens.

The new measures include pay and staff cuts in the public service as well as pension cuts and tax hikes for all Greeks.

The vote came after violent demonstrations that left one person dead and 74 injured.

ANZ senior markets dealer Alex Sinton said the successful vote did little to improve sentiment on currency markets.

"Passing (bills) through Parliament is a pretty different story than actually passing it through the populace," Mr Sinton said.

Hopes were that a three-day European Union summit, beginning today and involving finance and foreign ministers as well as heads of state and government, would agree to beef up Europe's financial rescue facility and recapitalise banks under threat from the burgeoning two-year euro-crisis.

Mr Sinton said investors weren't very optimistic that the summit would deliver strong enough measures to support ailing European economies.

He expected traders to sell their Australian dollars in the lead-up to the summit, in expectation of negative headlines on Monday.

"I would suspect that the levels over the last couple of days are going to be sold into, looking for a Monday morning session where the market is disappointed by the EU summit and looking for a test under 101.40 US cents."

At 7.00am (AEDT), the Australian dollar was trading at 102.42 US cents, up from 101.55 cents yesterday.

Since 5.00pm (AEDT) today, the currency traded between 101.47 US cents and 103 US cents.

At 11.30am (AEDT), the Australian Bureau of Statistics releases its international trade price indexes for the September quarter.

Mr Sinton said the data was unlikely to move the Australian dollar.