The local unit opened 1.3 US cents higher today as strong earnings reports in the US underpinned investor confidence for equities and commodity-driven currencies.

At 7am AEST, the dollar was exchanging at $US0.8830/34, climbing 1.47 per cent from yesterday's close of $US0.8703/05.
Since its domestic close yesterday at 5pm AEST, the local currency traded from $US0.8700 to $US0.8841.

Wall Street soared overnight after a positive beginning to the second quarter reporting season.

US blue-chip stock Alcoa declared earnings above market projections for the second quarter following the close of trade in New York yesterday. The aluminium producer announced a net profit of $136 million in the June quarter, an about-face from a loss of $454 million in the corresponding period last year.

The Dow Jones Industrial Average of 30 blue-chip stocks went up 1.44 per cent, and the broad-market S&P 500 index climbed 1.54 per cent.

The Australian dollar was bolstered by the increase in risk appetite on financial markets, according to Darren Richardson, corporate dealer with online currency trader OzForex.

"That was on the back of some very impressive performances, both on commodities and equities here in North America.

"We saw some good profit results from major companies in the US and that spurred investors to take on risk and that flowed onto commodities.

The local unit is buoyed by underlying market confidence, and when financial markets seem more ready to accept risk in investments, Mr Richardson said.

"When that is the case, the Aussie dollar does benefit and that is clearly shown today with the one (US) cent gain in your offshore session."

According to him, the release of the Westpac-Melbourne Institute survey of consumer confidence for July, scheduled today at 10.30am AEST, could influence investors on the local currency.

Treasurer Wayne Swan is also set to release revised economic predictions showing the Budget remains on track to return to surplus even with the revamped resources tax by 2013.

Mr Richardson predicts the local currency to range from $US0.8800 to $US0.8875 during today's domestic session.