The Australian dollar opened higher today against the US dollar as traders seeking better yield differentials dumped the greenback in favour of euros.
The domestic currency was at $0.7778/85, up from yesterday's close of 0.7744/47.
Overnight, the local currency traded between a low of $US0.7740 and a high of 0.7780.
The euro rose to 1.2981/86 against the US dollar from 1.2922/26 at the close yesterday.
While most economists appear to expect the Reserve Bank of Australia (RBA) to leave interest rates unchanged today, the dollar still could be in for heavy trading as traders try to divine the central bank's outlook on inflation, corporate dealer Alex Nicholas said. "As with any of these things, it's a bit of a coin toss," said Mr Nicholas.
"We expect the RBA to toe the company line, as it were, as it gives the obvious and necessary reasons for not raising rates but also highlighting that inflation remains a concern." All 17 economists surveyed by AAP last week expected the RBA would opt to leave rates steady at 6.25 per cent today.