THE dollar was higher at noon as strong corporate earnings in the US boost investor appetite for high-yielding assets.
At midday (AEST) today, the dollar was trading at $US0.8910/13, up 1.64 per cent from yesterday's close of $US0.8767/69.
Since 7am, the dollar traded between $US0.8908 and $US0.8950.
Wall Street closed higher following strong second-quarter earnings results from companies including Caterpillar, AT&T, 3M, UPS, American Express and Microsoft.
The Dow Jones industrial average index ended up 1.99 per cent.
Equity markets in Asia today followed the positive lead from Wall Street.
Australia's benchmark S&P/ASX200 index was up 1.62 per cent, while Japan's Nikkei-225 index was 1.87 per cent higher by 12.13pm.
CMC foreign exchange dealer Tim Waterer said the dollar benefitted from a lift in risk sentiment on financial markets during yesterday's offshore session.
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"The market took a lot of confidence from the corporate earnings that promoted more buying in the risk trade," Mr Waterer said.
"We saw US dollar buying dry up.
"That paved the way for the Aussie to push through the $US0.8850 level for the first time this month."
Mr Waterer said the currency retreated a little during Asian trade on Friday, but remained underpinned by the positive sentiment on equity markets.
"The Aussie dollar has had a bit of a slight pullback from a US2c run up overnight," he said.
"I expect it to hold the US89c level in the afternoon barring a sell-off in equities.
"They seem to be holding up quite well in the Asian region so far."
For the rest of the Asian session today, Mr Waterer forecast the dollar to trade between $US0.8885 and $US0.8950.
Meanwhile, the debt market was weaker at noon.
At midday today, the yield on the Commonwealth Government April 2020 bond was 5.205 per cent, up from yesterday's close of 5.140 per cent, while the May 2013 bond was at 4.690 per cent, up from 4.610 per cent.
On the Sydney Futures Exchange, the September 10-year bond futures contract was at 94.790, down from yesterday's close of 94.850, while the September three-year bond futures contract was 95.250, down from the previous close of 95.310.
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