The Australian dollar opened slightly higher on Tuesday as currencies remain in narrow ranges in subdued trade.

At 0700 AEDT, the Australian dollar was trading at $US0.8667/71, up from Monday's close of $US0.8664/66.

From 1700 AEDT on Monday, the local unit traded between $US0.8644 and $US0.8710.

"Event-wise, nothing happened (overnight)," Westpac New Zealand senior market strategist, Imre Speizer, said from Wellington.

"Most currencies just really consolidated inside recent ranges.

"For the Aussie and the Kiwi, it was paring back some of their recent losses and holding just above short-term levels."

Speizer said anxieties on financial markets about the debt and deficit levels of several European governments and the global economic recovery had hampered high-yielding assets such as equities and currencies such as the Australian and New Zealand dollars.

In recent weeks, financial markets have weakened on worries that debt-ridden countries such as Greece, Spain and Portugal may be unable to restore stability to their public finances, having spent heavily to combat recession.

"Stuff like the (debt problems of) European (governments) are not going to go away in a hurry," Speizer said.

"Those linger in the background."

A mixed night on overseas sharemarkets limited the movements on currency markets.

European bourses rebounded from falls at the end of last week, with London's FTSE-100 index closing up 0.62 per cent.

Wall Street was lower, however. With around 25 minutes left of trade in New York, the Dow Jones Industrial Averege was down 0.52 per cent.

The release of National Australia Bank's monthly business survey for January on Tuesday was unlikely to have much impact on the Australian dollar, Speizer said.

NAB's business confidence index declined by 11 index points to plus eight points in December.

Speizer forecasts the Australian dollar to trade between $US0.8640 and $US0.8710 during Tuesday's local session.

©2010AAP