UPDATE: THE Australian dollar closed higher today after a rally on the local share market augmented gains made late last week.

At 5pm AEST today, the dollar was trading at US91.69c, up from Friday's close of US90.80c.

Since 7am AEST this morning, the local currency traded between US91.75c and US91.47c.

CMC Markets foreign exchange dealer Tim Waterer said the local unit was boosted by a positive day on the local share market in an otherwise quiet day.

"For the most part it was a quiet day for the Aussie,'' Mr Waterer said.

"Til lunchtime we had local stocks not doing anything, then shares were up 34 points or so and the Aussie went up 20 pips.''

A broad-based rally ahead of the 4.15pm AEST close sent the benchmark S&P/ASX200 index up 34.3 points to 4,575.5 points at the close, while the broader All Ordinaries index gained 38.1 points at 4,615.7 points.

Mr Waterer said risk had been given a boost on Friday night (AEST) with the US Labor Department report showing the economy lost  54,000 jobs last month and the unemployment rate edged up to 9.6 per cent.

The job losses were much less than the 120,000 slump expected by Wall Street economists and incited a bout of risk buying on US markets.

Mr Waterer said the direction of the currency tonight (AEST) would depend on European stocks and whether they would continue the mood of the Asian trading day.

"Certainly US91.7c or US92c will happen tonight if we see European markets decide to keep momentum on equities,'' he said.

At 5pm AEST, the Australian dollar was at 77.30 Japanese yen, up from Friday's close of 76.56 yen, and at 71.01 euro cents, up from its previous close of 70.85.

The euro finished at 1.2702 US dollars, up from 1.2699 US dollars, and at 108.85 yen, up from 108.08.

The US dollar was at 84.30 Japanese yen, down from 84.32 previously.

US markets are closed tonight (AEST) due to the Labor Day public holiday.

Meanwhile, the Australian debt market closed weaker.

At 4.30pm AEST on the Sydney Futures Exchange, the September  10-year bond futures contract was at 95.080 (4.92 per cent), down from Friday's close of 95.165 (4.835 per cent).

September three-year bond futures declined to 95.440 (4.56 per cent) from 95.560 (4.44 per cent).

ICAP economist Adam Carr said market activity was slim ahead of the Reserve Bank of Australia's monthly rate-setting meeting tomorrow.

The market is expecting the RBA to leave the cash rate at 4.5 per cent for the fourth straight month, although Mr Carr predicted a bullish accompanying statement from RBA chief Glenn Stevens.

"I think they will be hawkish,'' he said, adding he believed the RBA would hint at a future rate rise, rather than a cut, to come.

"Activity on the bond market was a little more subdued than we have seen. People are waiting for the RBA.''

A higher cash rate erodes the value of safe haven assets such as bonds.

The quiet day on the local market was a marked difference to Friday night (AEST), Mr Carr said, when bond yields pushed higher immediately after the release of the US jobless data.

The 90-day bank bill closed at 4.730, down from Friday's close of 4.740, while the 180-day bank bill rate was at 4.850, down from  4.870 previously.

At 4pm AEST, the Reserve Bank of Australia's trade weighted index was at 70.5, up from Friday's close of 69.9.