THE Australian dollar was stronger at noon, though off its early morning highs, as traders bought high-yielding currencies.
At 12noon (AEST), the Australian dollar was trading at $US0.9289/94, up from yesterday`s close of $US0.9256/61.
During the morning, the Australian dollar traded between $US0.9291 and $US0.9320.
OzForex corporate dealer Alex Nicholas said the Australian dollar was "floating`` around before the market gained direction from offshore markets tonight.
The local unit was lower than its early morning highs after gaining more than US 0.5 cents overnight.
It was always going to be tough to hold onto those levels in the absence of any top-tier or really meaningful local data, Mr Nicholas said.
He said the Australian dollar generally traded in a "slowly ebb and flow`` manner during local trading while waiting for overseas markers.
Overnight the IMF said turmoil in credit markets could spread, and has warned that risks to global economic growth have increased.
Also, minutes from the US Federal Open Market Committee`s meeting for March gave a downbeat assessment of the US economy. The minutes were "very dovish`` and heightened expectation of a 50 basis points when the US Fed has its monthly meeting at the end of the month, Mr Nicholas said.
He said there was an appetite for risk with people searching for increased yields.
"That will certainly be a boost to currencies like the Aussie and the Kiwi, which at the moment are still relying on that yield advantage,`` Mr Nicholas said.
Consumer sentiment fell for the fourth straight month after the Westpac-Melbourne Institute Index for April was 1.9 per cent lower than the previous month.
The Westpac-MI index was 24.2 per cent lower than where it was a year ago and at its lowest level in nearly 15 years as households deal with higher interest rates and uncertain economy.
This was a "pretty shocking`` number, Mr Nicholas said.
He expects the domestic currency to trade in a tight range for the rest of today`s local session, between $US0.9275 to 0.9325.
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