Aussie dollar gains on back of US equiy strength

The Australian dollar has opened higher after touching a one-month high during the overnight session on the back of US equity strength as successful bond auctions eased debt fears in Europe.

At 7am AEST (9am NZT) today the Australian unit was trading at $US0.9179/83, up from yesterday's close of $US0.9158/61.

Since 5pm AEST yesterday the Australian currency has traded between $US0.9120 and $US0.9194, with the latter the Australian dollar's highest level since it reached $US0.9206 on August 9.

Commonwealth Bank vice president of institutional banking and markets Tim Kelleher said the Australian dollar strengthened against the Japanese yen overnight.

"The Nikkei ended up being heavily under pressure and the Aussie has continued to do well," Mr Kelleher said.

"Some of the European bond auctions were better so the general story overnight was a bit more calm returning."

He said a weaker US dollar also assisted the Australian dollar.

European stocks bounced back from early losses on Wednesday as fears for the health of the banking sector eased, while on the currency market the yen continued its surge and struck a fresh 15-year high against the dollar.

US stocks closed higher on Wednesday after a successful auction of Portuguese government debt eased worries about Europe's financial system.

Mr Kelleher said traders were awaiting another solid domestic jobs report, with the release of August labour force figures at 11.30am (AEST) today.

The market is expecting 25,000 jobs to have been created in the month and an unemployment rate of 5.2 per cent.

The jobless rate was 5.3 per cent in July.

Mr Kelleher predicted the Australian dollar would trade within current ranges.

"I think we'll see some (Australian) dollar/yen buying," he said.

- AAP