The Australian dollar is higher in the quiet Christmas period trade, as the greenback’s rally loses steam.

At 0700 AEDT on Monday, the local unit was trading at 81.25 US cents, up from 81.22 cents on Wednesday, before the Christmas long weekend.

Last week, it dropped as low as 80.89 US cents, its weakest level since June 2010 after new data showed the US gross domestic product (GDP) grew at its fastest pace in 11 years in the September quarter.

The figures increased hopes that the US Federal Reserve will raise its interest rate sooner than anticipated, which has helped the US dollar rally.

However, Brown Brothers Harriman global head of currency strategy Marc Chandler said that since then US dollar’s rally has lost momentum for the time being.

“The US dollar’s gains scored in the wake of a strong upward revision in third quarter GDP have been pared slightly in extremely thin market conditions,” he said.

“The US dollar stalled just above 120.80 yen, which is about one yen off the multi-year high set on December 8.”

AAP