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SYDNEY - The Australian dollar was stronger overnight as the local currency benefited from a rise in the yen, which sapped demand for the US currency.
At 0700 AEDT, the domestic currency was at $0.7759/64, up from yesterday's close of 0.7728/34.
Overnight, it reached a low of US$0.7728 and a high of 0.7768.
The dollar may trade in a narrow range today until US Federal Reserve governor Ben Bernanke gives a speech overnight setting the tone for Reserve Bank of Australia decision tomorrow on interest rates, Ozforex corporate dealer Alex Nicholas said.
"The speech may be a little taster before the RBA decision and more importantly what is said alongside the decision," Mr Nicholas said.
All 17 economists surveyed by AAP last week predicted the RBA would decide to keep interest rates at their current 6.25 per cent.
Gains in the Australian dollar were tempered by the ISM non-manufacturing survey which showed the US services sector expanded at a faster pace than expected, Mr Nicholas said.
"The index tempered gains," Mr Nicholas said.
The Institute for Supply Management said its index of business activity in the services sector advanced to 59.0 in January from 56.7 in December. Wall Street analysts had expected a reading of 57.
A reading above 50 indicates expansion, while one below that indicates contraction.
January marked the 46th consecutive month of business activity increase, the trade group said.
- AAP