Dollar firms on greenback selloff

February 20, 2008 07:29am

THE dollar opened marginally firmer today, punching above US92 cents in overnight trade on the back of a fresh bout of US dollar weakness.
At 7am AEDT, the dollar was trading at $US0.9204/07, up from yesterday's close of 0.9199/03.
During the overnight session, the domestic currency traded between a low of $US0.9137 and a high of 0.9237.
The dollar had been edging up towards 92 US cents over the past three days, supported by expectations that the Reserve Bank of Australia (RBA) may raise interest rates again when it meets on March 4.
The release yesterday of minutes from the RBA's February 5 meeting boosted those expectations after it was revealed the bank had come close to raising rates by 50 basis points, over the 25 basis points it eventually decided upon to 7.00 per cent.
OzForex corporate dealer Darren Richardson said the dollar's progress overnight had been driven mainly by a surge in oil prices.
The US dollar slipped lower against most of the major currencies after oil futures rose above $US100 ($109.55) a barrel for the first time since January 3.
The spike came as expectations that OPEC would keep production flat, or even reduce output, when it meets in March, stirred supply concerns.
Mr Richardson said the dollar also benefited from a boost in investor appetite for risk, demonstrated by a rally overnight in US equities. <