The Australian dollar opened stronger today as continued fighting in the Middle East kept a mild sell tone on the US currency. At 0700 AEST the local unit was trading at $US0.7526/30, up on Friday's close of $US0.7495/99. In offshore trade, it reached a low of $US0.7492 and a high of 0.7544. ICAP head of economics and strategy Michael Thomas said continued unrest in the Middle East remained the main driver of currency markets in an otherwise subdued offshore trade. "The Middle East story is really the only one that is going around that affected all markets," Mr Thomas said. "That probably put a bit of a bid tone into bonds and was a slight negative for the US dollar." Meanwhile, markets remain cautious ahead of local inflation numbers due for release on Wednesday. Economists are looking for a rise of 1.1 per cent in the consumer price index in the June quarter, which would bring the annual pace to 3.5 per cent, well above the Reserve Bank of Australia's (RBA) inflation target band of two to three per cent. "Some people are setting it up as a make or break for the RBA to hike rates," Mr Thomas said. "I think there's enough other things happening to say even if we do get a reasonable CPI, they could still easily hike." However, there was a wider range of CPI forecast in the markets than usual. "Obviously with greater uncertainty there's more chance for markets to be caught on the wrong foot and have to adjust," he said.