The Australian dollar drifted higher investors await the results of bank stress tests in Europe later this week.
At 1700 AEST, the Australian dollar was trading at $US0.8828/31, up 0.34 per cent from Tuesday's close of $US0.8799/01.
It was also buying 68.5 euro cents, 57.7 pence and 77 yen.
Since 0700 AEST, the dollar traded between $US0.8802 and $US0.8843.
Commonwealth Bank currency strategist Joseph Capurso said the local currency remained in a tight range during Asian trade.
''There is nothing that happened in Asia to push it in either direction,'' Mr Capurso said.
''The Aussie stock market was up nine points, the Nikkei was down a couple of points.''
Australia's benchmark S&P/ASX200 index closed up 0.21 per cent, while Japan's Nikkei-225 index ended down 0.23 per cent.
Mr Capurso said the release of the results from stress tests of European banks on Friday morning (0200 AEST) would probably stem the recent appreciation in the eurozone currency.
The tests will assess a bank's ability to withstand economic or financial distortions.
''People are just holding their breath for those stress tests out Friday morning,'' he said. ''I suspect those will be a bit disappointing.
''The euro will go down and the Aussie will go down for the ride as well.''
Economic events due during Wednesday's offshore session (AEST) include the Mortgage Bankers' Association's mortgage applications for week ending July 16.
Also, testimony from US Federal Reserve chairman Ben Bernanke to the semi-annual monetary policy report to Congress is due overnight (AEST).
Mr Capurso said Dr Bernanke was likely to disappoint rumours in financial markets of him talking about more quantitative easing to support the US economy.
Under quantitative easing, central banks flood the banking system with masses of money to promote lending. They usually do this when lowering official interest rates no longer is effective because they already are at or near zero per cent.
''Bernanke will talk about how some of the US data has softened a bit, but I don't think he is going to say that quantitative easing is back on the agenda,'' he said.
''So the US dollar could rise and the Aussie could fall back.''
Mr Capurso forecast the Australian dollar to trade between $US0.8700 and $0.8850.
''$US0.8850 is a very strong resistance point for the Aussie in the last couple of weeks,'' he said.
At 1600 AEST, the RBA's trade weighted index (TWI) was at 68.7, up from Tuesday's close of 68.3.
AAP