$AUD Stronger on the Back of Weak US Trade Deficit Figures

The Australian dollar opened stronger on Thursday, benefiting largely from US dollar weakness as it tumbled on record US trade deficit figures released overnight.

At 7am (AEDT), the local unit was trading at US75.60¢, slightly above Wednesday's close of US75.40¢.

Overnight, it hit a high of US75.36¢ and a low of US75.80¢.

Deutsche Bank foreign exchange strategist John Horner said the local currency benefiting from the US dollar tumble overnight.

"The weaker-than-expected trade deficit pulled the US dollar lower, although it was already under pressure going into the data, particularly against the yen, which had been strengthening considerably over the course of the day and continued to do so overnight," he said.

The US trade deficit hit a record $US68.9 billion ($91 billion) in October resulting partly from the strong increase of oil imports, the US Commerce Department reported on Wednesday.

Mr Horner said although the local unit was well bid against the US dollar, it fell against the Japanese yen as positions were unwound.

Also hurting the US dollar was the idea that the US Federal Reserve could be almost done raising rates after the bank dropped the "accommodation" from its policy statement.

However, Mr Horner still has penciled in three increases in the new year.

"There is some sentiment out there that the Fed is done tightening but we think it will keep going for some time yet and we will see renewed US dollar strength," Mr Horner said.