HEALTHY global equity markets and a weak US dollar have helped drag the Aussie dollar around US1c higher this morning.
At 7am (AEDT), the local unit was trading at US99.81c, up from US98.86c yesterday.
Since 5pm yesterday, the dollar traded between US98.84c and US100.22c.
Bank of New Zealand currency strategist Mike Jones said the dollar enjoyed a solid offshore session mainly thanks to a floundering US currency.
"There were reasonably solid gains in global equity markets and commodity prices overnight and that tended to reduce the demand for safe-haven currencies like the US dollar and the yen and bolstered demand for currencies like the Aussie dollar," Mr Jones said.
"A high euro also helped drag the Aussie dollar higher."
He said the local unit may trade within a tight range in the morning session as investors waited on consumer price index (CPI) data, to be released at 11.30am.
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The CPI, the key measure of inflation, is expected to have risen by 0.7 per cent in the December quarter for an annual rates of 3.0 per cent, according to a survey of 12 economists.
"The data is very much backward looking and the markets are now more uncertain about what's happening to inflationary pressures off the back of the floods," Mr Jones said.
"Unless we see a really surprising number one way or the other, I think we could see a relatively subdued reaction to these numbers compared to the normal situation."
He expected the Aussie to be well supported by a weak US dollar and strong commodity prices today, trading between US99.50c and US100c.
1 big trade led to market plungeDollar flat amid Euro fears
