Dollar higher as market bounces back

IMF cuts global growth for 2013 but the markets still track higher.

THE Australian dollar is higher, as overseas share markets bounce back from heavy losses yesterday.

At 0700 AEST today, the local unit was trading at 103.91 US cents, up from 103.72 US cents yesterday.

"Offshore markets heaved a sigh of relief that the rout in equity markets and gold prices didn't continue," Bank of New Zealand currency strategist Mike Jones said.

"There was pretty solid data out of the US, and a bounce in the gold price underscored a broad improvement in market conditions.

"In light of that, there were a few more buyers for the Australian dollar and that's helped it move up to 104 US cents."

US housing starts rose in March, coming close to a five-year high, while industrial production in March was stronger than expected.

Meanwhile, the Dow climbed 1.08 per cent and the S&P500 finished up 1.43 per cent.

Mr Jones said all eyes would be on Asian share markets and the gold price to see if the renewed market optimism continued.

If it does, then the Australian dollar should continue the overnight rally.

He expected the currency to trade in a range between 103.80 US cents and 104.50 cents today.

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