Aussie dollar opens weaker

The Australian dollar opened weaker after the Reserve Bank of India (RBI) surprised market observers by raising interest rates ahead of its scheduled meeting on April 20.

At 7am AEDT (9am NZT), the Australian dollar was trading at $US0.9144/47, down from Friday's close of $US0.9218/22.

Since 5pm AEDT on Friday, the Australian unit moved between $US0.9128 and $US0.9223.

Bank of New Zealand currency strategist Danica Hampton said the Indian central bank's decision on Friday (AEDT) to lift its repurchase rate surprised and depressed markets.

"Really risk aversion was the name of the game," she said.

"There's a risk that as investors digest the bank of India statement the Aussie might start the day on a softer footing."

The RBI raised the benchmark repo rate - at which the central bank makes short-term loans to commercial banks - to five per cent and raised the reverse repurchase rate - the rate at which it borrows from commercial banks - to 3.5 per cent.

"These measures should anchor inflationary expectations and contain inflation going forward," the RBI said in a statement after trading hours on Friday.

"As liquidity in the banking system will remain adequate, credit expansion for sustaining the recovery will not be affected."

Most economists had expected a rate hike, but not until the bank's scheduled policy meeting on April 20.

Meanwhile, Ms Hampton said market appetite for risk was also suppressed by ongoing concern about the Greek financial crisis.

On Friday (AEDT) Greek prime minister George Papandreou said his country would seek help from the International Monetary Fund (IMF) if the European Union fails to provide a financial aid mechanism to help his nation escape from its debt crisis.

The Euro has been under pressure for the past week because of the Greek crisis and debate among EU member states about how to deal with it.

"The failure of Greece to get financial assistance has impaired the Euro," Ms Hampton said.

With no market moving data due during the domestic session, Ms Hampton said the unit would trade in a tight range around $US0.9200.

"The dips will be limited," she said.

"We need to wait and see how Asian markets digest the bank of India news."

- AAP