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$A opens higher on Greek bailout request

The Australian dollar opened higher on Tuesday as Greece's request for aid moderated worries on financial markets of a possible default by the Eurozone nation.

At 0700 AEST, the Australian dollar was trading at $US0.9267/73, up 0.83 per cent from Friday's close of $US0.9193/95.

From 1700 AEST on Friday, the local unit traded between $US0.9174 and $US0.9312.

Australian markets were closed on Monday for the Anzac Day public holiday.

Financial markets received a boost on Friday after the Greek government asked the European Union (EU) and the International Monetary Fund (IMF) for 45 billion euros ($A64.45 billion) to pay looming debts.

Concerns about the Greek government's ability to repay its sovereign debt has sent jitters through financial markets in recent months on a possible flow-on to other eurozone members.

"On Friday night, the main story was the activation of the EU/IMF bailout plan for Greece," Bank of New Zealand currency strategist Mike Jones said.

"That provided a bit of a boost to risk appetite and growth sensitive currencies like the Aussie."

"It is still benefiting from a bit of a lift in risk sentiment on indications that Greece will not default on its sovereign debt."

The currency slipped from its overnight highs, however, on concerns about forthcoming financial legislation in the US and the Greek debt crisis.

"Some of the optimism about the bailout package has worn off," Mr Jones said.

"It looks like, if Greece does want this bailout package, it is going to come with some nasty conditions."

Economic events due on Tuesday include the National Australia Bank's survey of business confidence and the producer price indices from the Australian Bureau of Statistics (ABS), both for the March quarter.

Financial markets have forecast the PPI to have risen by 0.6 per cent in the March quarter after declining by 0.4 per cent the previous period.

Mr Jones said financial markets would look at the PPI data as a pointer ahead of the consumer price index report for the March quarter due for release on Wednesday.

For the local session on Tuesday, Mr Jones forecast the Australian dollar to trade between $US0.9230 and $US0.9340.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: ABS, Australian Bureau of Statistics, Bank of New Zealand, EU, IMF, International Monetary Fund, National Australia Bank

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