Aussie dollar opens at 2-month high

The Australian dollar opened at a two month high as risk appetite surged following a steeper-than-expected drop in US wholesale prices.

At 7am AEDT (9am NZT), the Australian dollar was trading at $US0.9229/30, up from Wednesday's close of $US0.9179/81.

It was the local unit's strongest open since it started the domestic session at $US0.9238/41 on January 20.

Since 5pm AEDT yesterday the Australian  unit moved between $US0.9253 and $US0.9175.

HiFX trading director Mike Hollows said the unit reached its intra-session high after the US Labor Department said prices paid by producers for goods fell 0.6 per cent in the February, its steepest drop in seven months. 

"The Aussie benefiting from renewed appetite for global risk," he said.

"(US92c) has been a ceiling for the last few days, and we're now on course to test US93c to US93.20c."

The median market forecast had been for a drop in prices of 0.2 per cent.

Mr Hollows said the report spurred a rally on Wall Street.

At the closing bell, the Dow Jones industrial average 0.45 per cent higher to 10,733.67.

The Dow traded above its recent closing high of 10,725.43 from Jan 19 and is at its highest level since October 2008.

The Standard & Poor's 500 index gained 0.58 per cent to 1,166.19.

Mr Hollows said the resource sensitive Australian dollar was also bolstered by firm commodity prices.

At 7.02am AEDT the Thomson/Reuters CRB index of nineteen commodity prices was 1.01 per cent higher at 276.3 points.

With no domestic data due during the domestic session, Mr Hollows said the unit could touch $US0.9270 before the 5pm AEDT close.

- AAP