THE dollar has opened half a US cent weaker after the US dollar strengthened in response to the release of more positive US economic data.
At 7am AEDT, the dollar was trading at $US0.9105/11, down from Friday's close of $US0.9164/71.
During the offshore session, the local unit traded between $US0.9093 and $US0.9196.
Bank of New Zealand currency strategist Mike Jones said further strengthening of the US dollar on Friday had been the main development in foreign exchange markets.
"There was some quite strong US data focused on the US consumer," he said.
US retail spending jumped 1.3 percent in November, showing broad gains led by auto and electronics sales.
The Commerce Department report, seen as a key to renewed economic growth, was much stronger than analyst expectations of an 0.6 per cent rise.
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Some special factors pushed up sales, including a six per cent rise in fuel sales, a figure affected by higher prices.
Electronics sales rose 2.8 per cent and auto sector sales 1.6 per cent.
Excluding volatile vehicle and gasoline sales, core retail spending was up 0.6 per cent, a positive sign for the economy in which two-thirds of activity comes from consumer spending.
Mr Jones said US consumer confidence was also stronger than expected.
"This assured people that the US recovery is progressing and is sustainable," he said.
"So that saw the US dollar move higher as people thought about an earlier start to the Fed's tightening cycle."
Mr Jones said the market appeared to brush off comments by US President Barack Obama's top economic aide Christina Romer, who on Sunday said the US jobless rate could rise further and that the improving US economy was not yet out of recession.
Asked if the 10 per cent unemployment rate could go higher, Ms Romer, who heads up the White House Council of Economic Advisers, told NBC: "It could well."
"These things certainly do bounce around. I would anticipate some bumps in the road as we go ahead," she told the network's "Meet the Press" program, noting that jobs were a key element of the economic recovery.
But Mr Jones said the market had already priced in a slight increase in US unemployment.
He said there was no notable data due for release in Australia until the Reserve Bank publishes its December board meeting minutes tomorrow.
He forecast continued US dollar strength, with dollar weakness expected.
"The US dollar was a bit firmer overnight so I think we'll see a continuation of that in the early part of the day," Mr Jones said.
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