THE Australian dollar closed higher today following a buoyant local share market and despite mixed data about the current account and business indicators.
At 5pm AEDT, the Australian dollar was trading at $US0.8976/78, up from Friday's close of $US0.8904/07.
Since 7am AEDT local close, the unit traded between $US0.9007 and $US0.8957.
Nomura Australia chief economist Stephen Roberts said the local unit gained throughout the day despite modest data releases from the Australian Bureau of Statistics.
"The data was kind of a mixed bag," he said.
"The current account deficit is widening out and that's subtracting from (Wednesday's) gross domestic product figure.
"But business inventories, sales and company profits were relatively good and netted each other off."
The nation's current account was a deficit of $17.459 billion, higher than the median market expectation for a deficit of $17.2 billion in the quarter, the ABS said.
The ABS said the result would knock 1.3 per cent from the December quarter gross domestic product due on Wednesday.
Until today's data, the median market forecast was for the economy to have grown by 0.9 per cent in the three months to December 31.
The ABS also said company gross operating profits rose 2.2 per cent in the December quarter, seasonally adjusted, but was down 11.2 per cent over the calendar year.
Meanwhile, estimated business inventories, in seasonally adjusted chain volume terms, rose 0.2 per cent in the December quarter after rising 0.1 per cent in the September quarter.
Economists were expecting inventories to have risen by either 0.5 per cent or 0.6 per cent in the December quarter.
Mr Roberts said the Australian dollar was also boosted by the stronger share market.
At the 4.15pm close, the benchmark S&P/ASX200 index had risen 1.05 per cent to 4686.5 points, while the broader All Ordinaries index added 0.94 per cent to 4694.9 points.
During the offshore session, the US-based Institute of Supply Management is expected to publish its manufacturing index for February.
The median market forecast is for the index to post 57.5, down slightly from the January result but still above the 50 level that separates expansion from contraction.
Also during the session, the US Census Bureau is due to release construction spending figures for January.
The median market forecast is for a 0.8 per cent fall in spending.
Mr Roberts said a poor outcome for the US data could have the local dollar slide lower, although a strong result might see the unit touch 90 US cents.
Meanwhile, the Australian share market closed higher in a reasonably broad rally as investors composed themselves following last month's company reporting season.
The benchmark S&P/ASX200 index rose 48.8 points, or 1.05 per cent, to 4,686.5 on Monday, while the broader All Ordinaries index added 43.8 points, or 0.94 per cent, to 4,694.9.
On the Sydney Futures Exchange, the March share price index futures contract was 87 points higher at 4,690 points on a volume of 29,626 contracts.
CMC markets market analyst David Taylor said early trading was largely driven by a lift in commodities prices.
A higher oil price coming off the back of data on US gross domestic product boosted energy stocks Woodside Petroleum and Santos.
"It was a broad-based rally despite a very weak lead from the US. It seemed to be commodities-driven, but that said, after energy, it was the consumer staples and healthcare sectors that were the big winners," Mr Taylor said.
"The market's stride has narrowed a bit in the wake of reporting season and we're looking in the medium term at the (interest) rates decision (on Tuesday) and economic data.
"I think the market is just composing itself after a pretty good reporting season."
In the resources sector, global miner BHP Billiton sagged 12 cents to $40.98.
Rio Tinto added 90 cents, or 1.28 per cent, to $71.40 as it beefed up its stake in Ivanhoe Mines as part of a deal to develop the Oyu Tolgoi copper and gold project in Mongolia.
Ivanhoe gained eight cents to $3.18.
Woodside Petroleum rose 10 cents to $43.47 and Santos gained 14 cents to $13.10.
Among the major banks, National Australia Bank lifted 17 cents to $25.61, ANZ Banking Group rose 45 cents to $23.59, Commonwealth Bank advanced 53 cents to $54.45 and Westpac put on 40 cents at $26.53.
In the gold sector, Lihir rose nine cents to $2.74 and Newcrest strengthened 80 cents to $32.14.
The price of gold in Sydney was $US1,118.53 per fine ounce, up $US9.15 on Friday's closing price of $US1,109.38.
Telstra slipped three cents to $2.94 and Optus-owner Singapore Telecommunications nudged up one cent to $2.41.
Retailer Woolworths surged 70 cents to $27.54 and Wesfarmers, which owns Coles, was up $1.47, or 4.7 per cent, to $32.60.
In the media sector, News Corp was 10 cents higher at $17.70, Consolidated Media was up eight cents at $3.20 and Fairfax gained 1.5 cents to $1.665.
Property developer Lend Lease Group declined 6.22 cents to $9.28 as it geared up for the second part of its equity raising, after it raised $434 million from its institutional component.
The top-traded stock by volume was Macquarie Office Trust, with 333.9 million shares worth $101.4 million changing hands. Macquarie Office was steady at 28 cents on Monday.
National turnover was 2.49 billion shares worth $5.38 billion, with 561 stocks up, 459 down and 361 unchanged.
On Wall Street on Friday, the Dow Jones Industrial Average index gained 4.23 points, to 10,325.26.
