$A hits new two-week high in quiet trade
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The Australian dollar rose to a new two-week high as currency traders remained optimistic that there will be no official interest rate cuts in the near future.
Since 0700 AEST on Wednesday, the local unit traded between 102.89 US cents and 103.16 cents, its highest level since July 5.
At 1700 AEST on Wednesday, the Australian currency finished the local session at 103.13 US cents, up from 102.97 cents on Tuesday.
CMC Markets foreign exchange dealer Tim Waterer said the local dollar continued to stay strong after the release on Tuesday of the minutes of the Reserve Bank of Australia (RBA) July 3 board meeting.
"The Australian dollar remains well supported in the wake of Tuesday's RBA minutes, which indicated that no imminent rate cuts are on the horizon," Mr Waterer said.
"A softer US dollar as well as a decent performance from equity markets this week points towards a rise in trading confidence, and these conditions will invariably suit the higher-yielding Australian dollar."
On Tuesday night, Australian time, the US Federal Reserve chairman Ben Bernanke indicated to a Congressional committee that he was open to more stimulus for the US economy.
Mr Waterer said the Australian dollar did not have much of a reaction to the Fed comments.
"Despite the non committal nature of Bernanke's speech, it seems traders on Wall Street decided to hear what they wanted to hear regarding the likelihood of further stimulus," Mr Waterer said.
"Perhaps it is the case that traders are so convinced that the US employment picture will remain bleak that Bernanke will have his hand forced over coming months."
At 1700 AEST, the Australian dollar was at 81.44 Japanese yen, up from Tuesday's close at 81.29 yen, and at 83.91 euro cents, up from 83.60 euro cents.
Meanwhile, Australian three-year bond futures prices were slightly higher.
Nomura rates strategist Martin Whetton said it was a very quiet day for the bond market, with prices trading in a tight range.
"There was nothing out of the Fed last night that changed things. We've had a very steady session."
At 1630 AEST on Wednesday, the September three-year bond futures contract was at 97.770 (implying a yield of 2.230 per cent), slightly up from 97.760 (2.240 per cent) on Tuesday.
The September 10-year bond futures contract was trading at 97.175 (2.825 per cent), where it finished the previous local session .
Mr Whetton said the bond market was awaiting the National Australia Bank March quarter business survey due on Thursday morning.