$A higher hits week high

THE Australian dollar has risen to its highest point in a week as commodity prices and share markets rally.

At 1200 AEST on Friday, the local unit was trading at 103.30 US cents, up from 102.46 cents on Wednesday.

Australian and New Zealand markets were closed on Thursday for the Anzac Day public holiday.

In early morning trade, the currency peaked at 103.41 US cents, its highest level since last Friday.

Easy Forex senior currency dealer Francisco Solar said optimistic investors were chasing high yielding risk assets like the Australian dollar and equities.

"The was little fresh news overnight to warrant any major move but if you look at commodity prices, gold is at a level not seen since April 15.

"That is always going to help a commodity currency like the Aussie dollar."peHowever, the Australian dollar has fallen to its lowest level in two years against the kiwi after the Reserve Bank of New Zealand (RBNZ) kept its cash rate unchanged at 2.5 per cent on Tuesday.

In a statement accompanying the decision, RBNZ governor Graeme Wheeler reiterated that the bank did not anticipate a rate change this year.

"The RBNZ meeting early this week has nicely helped kiwi dollar strength," he said.

"It's held on to most of its gains this week."

The key event for markets on Friday is the Bank of Japan meeting and monetary policy announcement, which is due late afternoon (Australian time).

The bank is expected to re-affirm its commitment to stimulating the nation's struggling economy even though that may result in higher inflation.

"That's probably where the Aussie dollar will take its cue from for the rest of the session," Mr Solar said.

Meanwhile, the Australian bond market was weaker at noon.

At 1200 AEST on Friday, the June 10-year bond futures contract was trading at 96.825 (implying a yield of 3.175 per cent), down from 96.850 (3.150 per cent) on Wednesday.

The June three-year bond futures contract was at 97.390 (2.610 per cent), down from 97.410 (2.590 per cent).At 0700 AEST on Friday, the local unit was trading at 102.90 US cents, UP from 102.46 cents on Wednesday.

Earlier:

"The two-day move you would pin on equities and commodities being higher," Westpac New Zealand senior market strategist Imre Speizer said.

The Australian dollar suffered some downward pressure on Thursday as the euro fell out of favour with currency traders, he added.

"Hard to explain the fall, it might be related to the fall in the euro as people expect the ECB (European Central Bank) will cut its interest rate next week."

The key event for markets on Friday is the Bank of Japan meeting and monetary policy announcement, which is due late in the afternoon (Australian time).

The bank is expected to re-affirm its commitment to stimulating the nation's struggling economy even though that may result in higher inflation.

During the offshore session on Friday, the US will release its gross domestic product (GDP) figures for the March quarter.

"I think the risks are to the downside for the Australian dollar because a lot of the good news has already been priced in for the Aussie, both for the Bank of Japan and the GDP," Mr Speizer said.

He said he expected the Australian dollar to trade in a range between 102.70 and 103.30 cents on Friday.

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