THE Australian dollar was higher today after global equity markets posted another night of gains on the back of signs the US central bank may be willing to help the economy.
The currency briefly passed above 107 US cents twice since the close of local trade yesterday.
The previous time it reached this level was on August 4.
At 1500 AEST today, the Australian dollar was trading at 106.86 US cents, up from 106.49 cents yesterday.
Since 0500 AWST today, the local unit traded between 106.52 US cents and 107.00 cents.
Last night, US stocks closed higher after minutes of the August 9 meeting of the Federal Open Market Committee showed the US Federal Reserve officials were willing to act if the American economy stalled.
Commonwealth Bank currency strategist Joseph Capurso said local trading volumes were thin compared to the volatile overnight moves in foreign equity markets recently.
``It's been very quiet after the hubbub of the last two weeks. People are sitting back,'' he said.
``It's not just the Aussie (dollar) that's been quiet, the euro has been quiet as well.''
Mr Capurso said currency markets were awaiting the publication of US private payrolls data for August.
The private payrolls report is a key pointer as to how the August non-farm payrolls numbers will go, which is the official measure of the US unemployment rate.
At 1500 AWST, the Australian dollar was at 81.91 Japanese yen, up from yesterday's close of 81.70 yen, and at 74.03 euro cents, up from 73.47 euro cents previously.
Meanwhile, the Australian bond market was firmer after the release of weak local credit and house price data.
At 1430 AWST the September 10-year bond futures contract was trading at 95.620 (implying a yield of 4.380 per cent), up from 95.575 (4.425 per cent) yesterday.
The September three-year bond futures contract was at 96.180 (3.820 per cent), up from 96.140 (3.860 per cent).
During the local session today, the RP Data-Rismark Hedonic Home Value Index showed that house prices in Australia's seven capital cities fell by 0.6 per cent in July.
UBS interest rate strategist Matthew Johnson said the data, as well as the RBA credit figures showing a very small rise in lending, encouraged traders to bid for safe-haven assets, such as bonds.
``Those two (pieces of data) were as expected, but it shows that things aren't going very well in the financial part of the economy,'' he said.
``That supported the bond market and there was also a good reception for the Treasury bond auction.
This morning, the Australian Office of Financial Management sold $700 million of July 15, 2022 Treasury bonds with a coverage ratio of 2.52.
The ratio refers to the value of bids received to the value of bonds offered.
Mr Johnson said it was a good coverage ratio for such a long-term bond.
Tomorrow, the Australian Bureau Statistics will release capital expenditure (capex) figures for the June quarter and retail trade numbers for July.
Mr Johnson said the focus would be on the more recent, retail trade data.
The RBA's trade weighted index was at 76.5, up from 76.4 yesterday.
