Business confidence boosts Aussie dollar

The Australian dollar opened higher after a business confidence survey boosted traders' hopes of an interest rate rise in April.

At 7am AEDT (9am NZT), the Australian dollar was $US0.9133/34, down from yesterday's close of $US0.9092/96.

Since 5pm AEDT yesterday, the Australian unit traded between $US0.9057 and $US0.9147.

NAB's strong business confidence index yesterday pushed the unit higher during an otherwise quiet offshore session, Bank of New Zealand currency strategist Mike Jones said.

The survey's business confidence index gained four points to plus-19 points in February.

It was the survey's highest level since November 2009 when it also touched the 19 mark, which at the time was a seven-year high.

"It really showed the Australian economy is growing at trend or above trend," Mr Jones said.

"That does support the case for future rate rises."

The current overnight cash rate is four per cent, after the Reserve Bank of Australia (RBA) lifted the cash rate from 3.75 per cent on March 2.

Most market analysts tip the RBA to take the cash rate to a "neutral" rate of 4.75 to 5.25 per cent over the next year.

A high official interest rate boosts the return on Australian dollar investments.

During the domestic session, RBA deputy governor (economics) Philip Lowe is to address the Urban Development Institute of Australia (UDIA) National Congress 2010 at the Sydney Convention and Exhibition Centre.

Meanwhile, China is to release trade data for February.

Mr Jones said the data could set the pace of the Australian dollar's movements during the domestic trading day with the unit expected to trade between $US0.9050 and $US0.9160.

- AAP