THE dollar was more than half a US cent higher this morning, on high oil prices and a weakening US currency.
At 7am AEDT, the dollar was trading at 101.48 US cents, up from yesterday's local close of 100.89 US cents.
Since5pm AEDT yesterday, the currency has traded between a low of 100.76 US cents and a high of 101.56 US cents.
In the early morning session (AEDT), benchmark crude oil was trading at $US105.75 a barrel, up 78 US cents from the previous closing price of $US104.97 a barrel.
Bank of New Zealand currency strategist Mike Jones said high commodity prices kept the dollar well supported overnight.
"Oil prices continue to climb, reflecting the uncertainty in the Middle East," Mr Jones said. "Oil prices are now flirting with two-and-a-half-year highs and that does tend to support the commodity linked currencies like the Australian dollar."
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During the offshore session, the US Commerce Department said sales of new singe family homes dropped 16.9 per cent to a seasonally adjusted 250,000 unit annual rate, the lowest since records began in 1963.
The disappointing data weakened the US dollar and helped give thecurrency a boost, Mr Jones said.
Softness in the euro and sterling also attracted investment in the domestic unit, with the dollar finishing the overnight session as the strongest performing global currency, he said.
Today, Reserve Bank of Australia (RBA) is due to release its Financial Stability Review.
"I think that will probably will have most of the limelight in today's session, but I don't think we will be getting anything new from them today," Mr Jones said.
Also, RBA assistant governor (financial system) Malcolm Edey was scheduled to speak at the Basel III Conference in Sydney.
Mr Jones said he expected the local unit to trade between 101.20 US cents and 101.70 US cents.
