$A higher as optimism grows over Greece

The Australian dollar is half a US cent higher as optimism grows that Greece will stay in the euro zone.

At 0700 AEST on Monday, the local unit was trading at 98.17 US cents, up from 97.64 cents on Friday.

Bank of New Zealand currency strategist Mike Jones said the increased likelihood that Greece will stay in the euro zone after the June 17 elections helped market sentiment.

"It's a very strong start to the week for the Aussie," Mr Jones said from Wellington.

"There was a couple of bits of news that underpinned the Aussie, one of which is the pro-bailout parties are starting to gain a bit more support and that's seen fears of Greece leaving the euro zone recede.

"There was also talk of a bailout fund for European banks being set up.

"That's seen risk-sensitive currencies like the Aussie shoot higher."

Mr Jones said he expected news about the euro zone debt crisis and the prospects of Greece staying in the euro zone will drive currency markets early this week.

A raft of US economic data will be released later this week, the highlight of which will be May non-farm payrolls, the key measure of employment growth in the world's largest economy.