THE Australian dollar has closed higher after taking its lead from rebounding share markets in the Asian region.
At 1700 AEDT, the Australian dollar was trading at $US0.9009/13, up 0.05 per cent from Wednesday's close of $US0.9005/07.
Between 0700 AEDT and 1700 AEDT on Thursday, the local unit traded between $US0.8931 and $US0.9026.
CMC Markets foreign exchange dealer Jian Wei said the local currency rebounded in line with Asian and domestic share market on Thursday.
Asian stocks rose for the first time in nine days and the US dollar gained on signs profits are recovering and the US Federal Reserve will reduce stimulus measures as the American economy recovers.
"The Aussie dollar moved back above 90 US cents on the back of the overall Asian market rebound," Mr Wei said.
He said the local currency took its lead from Japan and Hong Kong where domestic share markets rebounded nearly 2 per cent, while the Australian bourse was also firmer.
The benchmark S&P/ASX200 index rose 28.7 points, or 0.62 per cent, to 4,673.3, while the broader All Ordinaries had lifted 27.7 points, or 0.59 per cent, to 4,697.7.
Japan's Nikkei average rose 1.3 per cent on Thursday, with upbeat reports on profits at Honda Motor and Sony Corp adding to momentum from strong earnings at other big name stocks such as Canon.
Mr Wei said the gains helped to support high-yield currencies such as the Australian dollar but there was still uncertainty in the market.
"There has been a sell off on stockmarkets in the last few days, so the market will still be very cautious," he said.
He predicted the local currency would stay around the 90 US cent range in overnight trade as traders examined whether falling metal prices had reached the bottom.
Meanwhile, the Australian share market closed modestly higher on Thursday, boosted by investor reaction to upbeat remarks in United States President Barack Obama's State of the Union address.
The benchmark S&P/ASX200 index rose 28.7 points, or 0.62 per cent, to 4,673.3, while the broader All Ordinaries lifted 27.7 points, or 0.59 per cent, to 4,697.7.
On the Sydney Futures Exchange, the March share price index futures contract was 56 points higher at 4,647 on volume of 35,563 contracts, according to preliminary calculations.
CMC Markets market analyst David Taylor said there appeared to be little driving the local market other than the speech by President Obama.
Mr Obama said in his address that the worst of the economic storm had passed but a trail of devastation had been left behind.
Mr Obama asked the US Senate to swiftly pass a bill to create jobs in a bid to ease double-digit unemployment in the US.
Mr Taylor said trading on the local bourse had been lacklustre until Mr Obama's began his speech.
"Then our futures market rocketed and our benchmark index ran up about 20 extra points," Mr Taylor said.
"I think they (investors) liked his (Mr Obama's) confidence and the fact that he said that he'd never seen a brighter future for America ... he sounded very upbeat about America's prospects and the market wants to see a leader in control."
In the resources sector, global miner BHP Billiton was 40 cents richer at $40.70 and Rio Tinto rose $1.54 to $71.44.
Lead and zinc miner Perilya eased one cent to 62.5 cents as it said it expected to make development decisions for several projects in coming months.
Oil and gas producer Woodside Petroleum jumped 68 cents to $43.68 and Santos firmed six cents to $13.20.
Oil Search eased six cents to $5.36 as it delivered 2009 output within its forecast range but flagged a 10 per cent fall in production this calendar year.
Among the major banks, Westpac was up 25 cents at $24.58 after it joined other financial institutions in upgrading its online trading platform and said it expected to grow its customer base as a result.
National Australia Bank rose 39 cents to $26.69, Commonwealth Bank was 47 cents heavier at $55.10 and ANZ put on 19 cents at $22.15.
In the gold sector, Newcrest fell 17 cents to $32.13 as it recorded a 17 per cent increase in production in the second quarter of fiscal 2010 but maintained guidance for full year production.
Newmont was up three cents at $4.92 and Lihir slipped three cents to $2.89.
The price of gold in Sydney was $US1090.05 per fine ounce, down $US7.06 on Wednesday's closing price of $US1097.11.
Telco Telstra scraped off one cent at $3.42.
Retailer Woolworths was 61 cents poorer at $26.19 and Wesfarmers, which owns Coles, was off 40 cents to $28.25.
In the media sector, News Corp improved two cents to $16.72 and its non-voting stock lifted five cents to $14.19.
Consolidated Media added two cents to $3.01 and Fairfax sagged 2.5 cents to $1.75.
Among other stocks, online travel agent Webjet inched forward one cent to $2.30 as it said it was cautiously optimistic about the rest of the financial year after posting a rise in first half profit.
Wholesale distributor Alesco was 10 cents higher at $4.35 after it remained cautious about its outlook and said its second half would be influenced by the timing of recovery in the new housing and renovations markets.
The top-traded stock by volume was drug delivery technology developer OBJ Ltd, with 182.09 million shares worth $7.83 million. OBJ shares were 1.7 cents lower at 3.6 cents.
National turnover was 2.66 billion shares worth $6.21 billion, with 513 stocks up, 566 down and 337 unchanged.
On Wall Street on Wednesday, the Dow Jones industrial Average index added 41.87 points, or 0.41 per cent, to 10,236.16.
