The Australian dollar is higher as global risk appetite firmed overnight after fears of a US interest rate rise eased.

At 7am (AEDT), the currency was trading at US70.84c, up from US70.68c on Monday.

ANZ senior FX manager Sam Tuck said it was a perky night for risk with global equity and commodity markets up, which boosted risk-related currencies like Australia, Canada and New zealand.

Mr Tuck said US and UK service sector data – two of the leading lights in the tightening theme – both underperformed expectations, which may delay the onset of respective rate hikes.

Meanwhile, investors are looking forward to the Reserve Bank of Australia’s cash rate decision on Tuesday, with the central bank expected to keep it on hold at two per cent.

Westpac strategist Imre Speizer tipped the Aussie to break higher on Tuesday, thanks to expectations the Fed may delay rate hikes.

Source : Businessspectator