Australian dollar moves higher

The Australian dollar has opened firmer after moving steadily higher on positive global risk sentiment.

At 7am AEST (9am NZT) today, the Australian unit was trading at $US0.9174/77, up from yesterday's close of $US0.9169/71.

Since 7am AEST, the Australian dollar has traded between $US0.9151 and $US0.9181.

Bank of New Zealand currency strategist Mike Jones said the Australian dollar continued its upward momentum and traded in a tight range during offshore session.

North American markets were shut for a public holiday on Monday.

"The Aussie drifted up from just below US$0.9160 to US$0.9180, so it was a very tight range overall," Mr Jones said from Wellington.

"But I guess overall sentiment remains fairly buoyant in line with gains in global risk appetite."

He said the Reserve Bank of Australia (RBA) was expected to keep the cash rate unchanged at 4.50 per cent when it publishes its monthly interest rate decision at 2.30pm (AEST).

"People will be looking closely at the statement, particularly given the stronger domestic data we've seen of late," Mr Jones said.

"Traders will also be closely watching whether Prime Minister Gillard is able to cobble together a minority government."

Mr Jones said if the Greens were involved in forming a government, concessions around the mining tax would be seen as a negative for the Australian dollar.

"But that really depends on what impact the shape of the government is," he said.

"Overall we're in for a relatively lacklustre day."

- AAP