THE dollar opened higher today amid more market speculation over the how much stimulus the US economy will receive from its central bank.
At 7am (AEDT), the dollar was trading at US97.86c, up from yesterday's close of US97.60c.
Since 5pm yesterday, the local unit has traded between US97.44c and US98.20c.
Westpac New Zealand senior market strategist Imre Speizer said the value of the dollar was still being governed by US dollar movements.
"That was the driver overnight: a fairly clear downward movement in the US dollar," Mr Speizer said from Auckland.
The key event for US market will be next week's decision by the US Federal Reserve to undertake a second round of buying government bonds from banks in an effort to encourage them to lend more money and stimulate the struggling US economy.
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The policy is called quantitative easing, or QE.
The Federal Open Market Committee (FOMC) of the Fed is expected to announce the decision after its meeting on November 3.
Mr Speizer said the US dollar fell overnight on more speculation over Quantitative Easing.
"I think that was residual effects of yesterday's news that went out in our afternoon that the Fed was surveying bond traders on their opinions of how much QE they think they'll do and what the reaction of the market would be," he said.
"It's not unusual for the Fed to canvas opinions of the market effects of various actions. In fact the Fed does it all the time.
"It could imply the Fed don't want to disappoint the market.
"They want to pump in as much or more than the market thinks they will; they don't want to disappoint the market by pumping in too little.
"So if you reach that thought, you would think that there would be as much QE as expected or possibly more and it should be a negative for the (US) dollar."
Mr Speizer expects the dollar to trade between US96.50c and US98.50c today.
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