Australian dollar gains ground

The Australian dollar opened slightly stronger today, trading in a tight range after a night of mixed economic signals from the United States.

At 7am AEST, the Australian unit was trading at $US0.8904/09, up from yesterday's close of $US0.8893/96.

Since 5pm AEST yesterday, the Australian currency traded between $US0.8861 and $US0.8919.

Westpac New Zealand senior market strategist Imre Speizer said the Australian dollar traded in a fairly narrow range overnight.

"It did make a new session low that was not too much lower than when we left it at the close in Sydney," Mr Speizer said.

Economic data from the US overnight showed consumer confidence rose more than expected in August and home prices ticked up in June, though a separate report showed business activity in the US Midwest grew in August a bit less than economists expected.

"So it was a mixed bag, but the ones the market looked at closely were a little bit better," Mr Speizer said from Wellington.

"House prices were the ones that came out first and they were the ones that perked the equity markets up a little bit."

Minutes of the US Federal Open Market Committee's (FOMC) August 10 meeting were released overnight. The minutes showed the FOMC would consider going beyond a modest program to purchase government debt if necessary to boost the US economy.

Mr Speizer said the minutes resulted in a small sell-off.

"What you had was US data... a little better and (they) gave the Australian dollar a boost, then (the Fed minutes) pushed it back: net effect unchanged."

Mr Speizer said the main event for the Australian dollar today would be the release of Australian national accounts data, which includes Gross Domestic Product (GDP), at 11.30am AEST.

He predicted the Australian dollar would trade between $US0.8850 and $US0.8950 this morning.

"That range is good for half a day.

"If you don't get a surprise out of GDP, it'll remain in that range until tonight," Mr Speizer said.

- AAP