THE Australian dollar closed the local session stronger, climbing more than one US cent on optimism the Greek parliament will pass a package of austerity measures in a vote tonight.
At 5pm (AEST), the Australian dollar was trading at 105.85 US cents, up from 104.46 US cents yesterday.
Since 7am (AEST) today, the local unit traded between 105.21 US cents and 105.81 US cents.
St George Bank economist Janu Chan said the Australian dollar had strengthened as markets began pricing in a positive decision in Greece.
"It looks like investor sentiment has improved a bit and that's largely in regard to developments in Greece,'' she said.
"The market is widely expecting that package to pass, so that puts Greece one step closer to receiving aid from the EU and IMF.''
The Greek parliament is expected to vote on a $38 billion package of austerity measures tonight.
The measures need to pass in order for Greece to secure a new EU-IMF bailout that could reach $136.1 billion.
Ms Chan said progress on the Greek austerity measures would continue to be main focus of markets this week.
The RBA's trade weighted index was at 76.9, up from 76.2 yesterday.
