/www.fxserver.com/ THE dollar closed slightly up, ending a volatile week on a quiet note ahead of further wrangling over military against Iraq.
At 1700 AEDT, the dollar was at $US0.5953/58 compared with $US0.5915/20 at yesterday's close.
On Monday the dollar was trading at $US0.6124, since then it has taken a nosedive to round out a disappointing week about US1.7c lower.
The local currency hit a one-month low at $US0.5896 in yesterday's trade, the result of a two-day selling onslaught from speculative traders.
The local currency scrambled back to trade the mid-US59c region today, but remains nearly two-and-a-half US cents off last week's near three-year high of $US0.6182.
"Overall, this has just been a pull back in the broader up trend and I still remain bullish about the Australian dollar," ANZ Investment Bank chief dealer Paul McNee said.
"The market's had a fairly volatile week and going into the weekend people are not going to be wanting to run big positions with a risk that something could happen."
It was a quiet trading day for the dollar, which roamed between $US0.5940 to 0.5958.
Mr McNee said the dollar would consolidate at these levels heading into next week given that investors' thoughts will be centred on war with Iraq.
"I think people are going to be a bit worried about what's going to happen next week," he said.
The US White House dropped demands for a United Nations Security Council vote this week on war with Iraq and hinted it might forgo UN approval for military action altogether.
"The market's moving to the view that maybe the deadline could be postponed a little bit," Mr McNee said.
"This is probably good for the US dollar, but any turnaround in those thoughts could put the US dollar under pressure again which might help the Aussie."
At 1600 AEDT the dollar on the Reserve Bank of Australia Trade Weighted Index (TWI) was at 53.9 points from 53.7 at yesterday's close.