THE dollar closed higher after a rally on the local sharemarket augmented gains made late last week.
At 5:00pm AEST, the local unit was trading at US91.70c, up from Friday's close of US90.82c.
Since 7:00am AEST, the local currency traded between US91.75c and US91.47c.
CMC Markets foreign exchange dealer Tim Waterer said the local unit was boosted by a positive day on the local sharemarket in an otherwise quiet day.
"For the most part it was a quiet day for the Aussie," Mr Waterer said.
"Til lunchtime we had local stocks not doing anything, then shares were up 34 points or so and the Aussie went up 20 pips."
A broad-based rally ahead of the 4:15pm AEST close sent the benchmark S&P/ASX200 index up 34.3 points to 4575.5 points at the close, while the broader All Ordinaries index gained 38.1 points at 4615.7 points.
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Mr Waterer said risk had been given a boost on Friday night (AEST) with the US Labor Department report showing the economy lost 54,000 jobs last month and the unemployment rate edged up to 9.6 per cent.
The job losses were much less than the 120,000 slump expected by Wall Street economists and incited a bout of risk buying on US markets.
At 5:00pm AEST, thedollar was at 77.30 Japanese yen, up from Friday's close of 76.56 yen, and at 71.01 euro cents, up from its previous close of 70.85.
The euro finished at 1.2702 US dollars, up from 1.2699 US dollars, and at 108.85 yen, up from 108.08.
The US dollar was at 84.30 Japanese yen, down from 84.32 previously.
US markets are closed on Monday night (AEST) due to the Labor Day public holiday.
Meanwhile, thedebt market closed weaker.
At 4:30pm AEST on the Sydney Futures Exchange, the September 10-year bond futures contract was at 95.080 (4.92 per cent), down from Friday's close of 95.165 (4.835 per cent).
September three-year bond futures declined to 95.440 (4.56 per cent) from 95.560 (4.44 per cent).
ICAP economist Adam Carr said market activity was slim ahead of the RBA's monthly rate-setting meeting on Tuesday.
The market is expecting the RBA to leave the cash rate at 4.5 per cent for the fourth straight month, although Mr Carr predicted a bullish accompanying statement from central bank chief Glenn Stevens.
"I think they will be hawkish," he said, adding he believed the RBA would hint at a future rate rise, rather than a cut, to come.
"Activity on the bond market was a little more subdued than we have seen. People are waiting for the RBA."
A higher cash rate erodes the value of safe haven assets such as bonds.
The quiet day on the local market was a marked difference to Friday night (AEST), Mr Carr said, when bond yields pushed higher immediately after the release of the US jobless data.
The 90-day bank bill closed at 4.730, down from Friday's close of 4.740, while the 180-day bank bill rate was at 4.850, down from 4.870 previously.
At 4:00pm AEST, the RBA's trade weighted index (TWI) was at 70.5, up from Monday's close of 69.9.
Shares up at noon thanks to banks, minersWeak hiring hobbles economy
