THE dollar opened a touch higher, supported by the prospect of an interest rate rise from the Reserve Bank of Australia (RBA).
At 7am (AEST), the dollar was trading at $US0.9263/65, up slightly from yesterday's close of $US0.9257/60.
Since 5pm (AEST) yesterday, the local unit has traded between $US0.9229 and $US0.9275.
Bank of New Zealand currency strategist Danica Hampton said the local unit had been well supported during offshore trade as debt futures markets priced in a 70 per cent chance of an interest rate rise from the RBA.
Should the board decide to lift the rate, it is likely to be by 25 basis points, which would take the benchmark interest rate to 4.5 per cent.
The RBA is expected to deliver its decision at 2.30pm (AEST) today.
"We have seen the Aussie dollar recover a little bit, partly because (US) equities were stronger ... and because of the chance of an RBA rate hike today," Ms Hampton said.
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"The tone of the statement will be important, to gauge if there are more hikes in the pipeline."
If the RBA decides to lift the cash rate, it will be the sixth rate hike in the past eight months.
During yesterday's offshore session, the euro and European stocks fell as governments scrambled to get 110 billion euros ($158.74 billion) bailout money flowing to Greece.
Ms Hampton said the local dollar had been shielded from the falling euro and European prices.
"People are getting more discerning about Greece," she said.
"What's bad for the euro is not necessarily bad for the world."
Ms Hampton said the local dollar could touch $US0.9340 if the RBA announced an interest rate rise.
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