The Australian dollar closed higher today after hitting a 13-month high as a rise in resource prices lifted the commodities-driven currency.
At 5pm (AEST), the Australian dollar was trading at $US0.8794/97, up slightly from Wednesday's close of $US0.8789/92.
During the day, the unit moved between $US0.8781 and $US0.8860.
The local currency started the local session at $US0.8830/33 and rose to $US0.8860 in morning trade, its highest level since August 11, 2008.
A senior dealer with online currency trader EasyForex, Francisco Solar, said the Australian dollar was lifted initially on higher prices for commodities.
Crude oil for November delivery rose $US3.90 to close at $US70.61 a barrel on the New York Mercantile Exchange.
The price of gold in Sydney at 1713 AEST was $US1007.52 per fine ounce, up $US10.75 on Wednesday's closing price of $US996.77.
"This morning we had a nice positive sentiment heading into Asia, with commodities higher," Mr Solar said.
The currency had also benefited on raised expectations of the Reserve Bank of Australia lifting interest rates following a firm retail sales report on Wednesday, Mr Solar said.
Retail turnover increased by 0.9 per cent in August, almost double market expectations of an 0.5 per cent rise, official data showed.
A rise in interest rates attracts investors to deposit funds where they can find higher yields.
"We also had the great retail sales report yesterday where markets had started pricing in a rate hike sometime this year," Mr Solar said.
"They have nearly priced in two rate hikes 50 basis points this year.
"That is positive for the Aussie and helped to push it to its high earlier today."
Mr Solar said weaker equity markets hampered the rise of the Australian dollar during afternoon trade.
The benchmark S&P/ASX200 index closed down 0.9 per cent, Japan's Nikkei-225 index ended 1.53 per cent lower and Korea's KOSPI index lost 1.7 per cent.
"The Nikkei has not been performing that well today to be down 1.5 per cent, so that will always put a cap on any upside move for the Aussie," Mr Solar said.
Economic events due in the US include pending homes sales for August, Institute for Supply Management's manufacturing index for September and initial claims for jobless benefits for the week ending September 26.
Also, US Federal Reserve chairman Ben Bernanke testifies to the House Committee on Financial Services on regulatory reform.
Mr Solar forecast the Australian dollar to trade between $US0.8750 and $US0.8860 during Thursday's offshore session.
Meanwhile, the Australian share market closed lower today after a negative lead from United States markets.
The benchmark S&P/ASX200 index had fallen 42.5 points, or 0.9 per cent, to 4701.1, while the broader All Ordinaries index dropped 37.3 points, or 0.79 per cent, to 4702.0.
On the Sydney Futures Exchange, the December share price index futures contract was down 27 points at 4720, on a volume of 30,271 contracts.
"With light volume in Asian trade, it was bit like the (Australian) market was lost in the wilderness," CMC Markets market analyst David Taylor said.
"And despite some encouraging economic data coming from our shores, the market simply didn't like the weakness in the data from the US overnight."
The Australian Industry Group-PricewaterhouseCoopers performance of manufacturing index on Thursday showed that manufacturing activity expanded for a second straight month in September as the sector responded to government stimulus measures and low interest rates.
But data from the US showed a steep drop in private sector payrolls, which fueled jitters over the global economic outlook.
