SYDNEY – 26/11/2009 07:53:43 AM [AAP]

The Australian dollar opened almost a cent higher after an upbeat assessment of the local economy from the Reserve Bank, and overnight weakening in the US dollar.

At 0700 AEDT, the Australian dollar was trading at $US0.9316/32, up from Wednesday’s close of $US0.9240/43.

During the offshore session, the local unit traded in a range between $US0.9238 and $US0.9318.

The local unit pushed higher overnight following a speech yesterday by RBA deputy governor Ric Battellino, Bank of New Zealand currency strategist Danica Hampton said.

“Part of that was in the wake of Ric Battellino’s comments that were relatively upbeat about Australia’s economic outlook,” Ms Hampton said from Wellington.

Mr Battellino said a recent rebound in economic activity in Asia was positive for the nation as it emerged from the global economic downturn.

It was also 18 years since Australia experienced negative year-end gross domestic product (GDP) growth, he told delegates at the National Housing Conference in Melbourne.

“But also we’ve seen US dollar weakness across the board overnight,” Ms Hampton said.

Three main factors contributed to the weakness of the US currency including Russia saying it was going to diversify their foreign reserves and buy Canadian dollars, she said.

The Swiss National Bank suggested it was getting close to tightening monetary policy which had strengthened the Swiss Franc against the US dollar and fresh highs in gold had also taken away from the US dollar.

“That helped underpin commodity-driven currencies like the Australian dollar,” she said.

Ms Hampton forecast the dollar would trade on Thursday between US$0.9240 and $US0.9375.

“The Aussie will remain well underpinned in the domestic session,” she said.