THE Australian dollar closed marginally higher on Friday with cautious investors and a lack of fresh data keeping the currency within a limited range.
At 5pm AEDT, the Australian dollar was trading at $US0.9218/22, up from yesterday's close of $US0.9202/05.
During the day, the local unit moved between $US0.9191 and $US0.9226.
The Australian dollar opened slightly firmer at $US0.9213/14 at 7am AEDT, having touched a high of $US0.9245 during the offshore session.
Speculation the US Federal Reserve was set to raise its discount rate initially pushed the US dollar higher, but the move came unstuck after the rumours proved unfounded.
That helped lift the Australian dollar back above $US0.9200.
The discount rate is the interest rate the US Federal Reserve charges banks to borrow money directly from the central bank.
The Australian dollar suffered from a lack of direction and kept within a tight range during Friday's local session, amid a lack of economic data and a flat day on equity markets.
Nomura Australia chief economist Stephen Roberts said most markets were suffering from little new information and lingering investor caution.
``It's just keeping people sidelined,'' Mr Roberts said.
``Not too many people out there are going to take a brave position and try and say it is going to go in whichever direction because there is nothing to really drive it in the near term.
``You need some sort of stage left surprise event from somewhere to make a difference and you can't forecast those.''
There was no US economic data release due during Friday night's (AEDT) offshore session.
Mr Roberts said he expected currency markets to take their cues from how Wall Street fared at the end of a week where the broad market S&P 500 has risen 1.4 per cent so far.
Meanwhile, Australian share market closed marginally higher on thin trading volumes as investors switched out of Rio Tinto into the energy sector.
The benchmark S&P/ASX200 index was up 9.1 points, or 0.19 per cent, at 4,872.2 points, while the broader All Ordinaries index added 12.4 points, or 0.25 per cent, to 4,890.1 points.
On the Sydney Futures Exchange at 4.17 AEDT, the June share price index contract was 14 points higher at 4,893 points, on volume of 15,266 contracts.
CommSec market analyst Juliette Saly said it was encouraging to not see the usual Friday afternoon sell-off.
``If we can hold on to the slight gains that we've got, that will be a good outcome because we'll hold on to those eight-week highs,'' Ms Saly said.
Ms Saly said the Commonwealth Bank was a drag on the market, finishing 40 cents weaker at $56.21.
Westpac rose 13 cents to $27.43, National Australia Bank gained 15 cents to $26.90 and ANZ firmed 23 cents to $25.11.
The major miners were mixed, with BHP Billiton gaining four cents to $43.20 and Rio Tinto dropping 80 cents, or 1.04 per cent, to $76.19.
Rio Tinto has struck a deal with Aluminum Corporation of China (Chinalco) to develop the Simandou iron ore project in west Africa.
Energy stocks were higher despite a lower oil price overnight and in electronic trading on Friday.
Oil Search was three cents stronger at $5.90, Woodside put on 48 cents, or 1.04 per cent, to $46.73 and Santos was up three cents to $14.25.
