THE dollar opened higher today, bouncing back overnight, after the release of weak US manufacturing data and further negativity about the US economy.
At 7am (AEDT), the dollar was trading at US99.37c, almost US1c higher than yesterday's close of US98.48c.
Since 5pm yesterday, the local unit traded between US98.01c and US99.45c.
Data released overnight showed US factory output, the largest element of industrial production, fell 0.2 per cent in September.
Bank of New Zealand currency strategist Mike Jones said the dollar rebounded after being under pressure in yesterday's local session.
"That was driven by another souring in US sentiment," Mr Jones said.
"This time we had some weak US industrial production figures along with some more dovish comments US Federal Reserve officials."
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Also overnight, Atlanta Federal Reserve President Dennis Lockhart told reporters that any stimulus from the Fed, "has to be reasonably large."
Mr Lockhart sits on the US Federal Open Market Committee board (FOMC), which oversees the Fed.
"So that soured sentiment towards the US dollar and catapulted the Australian dollar back above US99c," Mr Jones said.
In today's local session, the Reserve Bank of Australia (RBA) releases minutes of its October 5 monetary policy meeting.
"There will be more attention than normal on those minutes given the RBA surprised markets in October by not raising interest rates," Mr Jones said.
"The minutes will be examined for any indication the RBA is still thinking about raising interest rates this year."
Mr Jones said the market also will watch for Chinese economic data due on Thursday.
"The Chinese economy has been defying expectations of a sharp slowdown, which has tended to support the Australian dollar, so whether or not that continues will certainly be important to Australian dollar sentiment," Mr Jones said.
Mr Jones expects the unit to trade between US98.50c and US99.70c today.
1 big trade led to market plungeDollar lower at noon, below parity
