The Australian dollar emerged as the day's biggest gainer as the market settled down to a quiet day's trade, fuelled by the continent's strong growth and high interest rates. The currency has been a firm favourite, buoyed by the revelation that the Reserve Bank of Australia (RBA) considered hiking interest rates by 50 basis points at its last meeting. In the event, the RBA delivered a 25 basis point increase to 7.00 pct. The Aussie dollar was just under a four-month high against the dollar. "The Aussie dollar appears to have it all. Australia continues to enjoy a pretty positive economic backdrop and a hawkish central bank," said Simon Derrick at Bank of New York Mellon. While some chinks have started to appear in the run of strong Australian data, underlying strength remains intact. Last week, a poor consumer confidence report from the Westpac-Melbourne Institute showed that Aussie households are not immune to events outside their fair country. This could well dent future spending levels, but thus far there are no such signs: Aussie retail sales have grown by an average 0.7 pct month-on-month in the last two months, added Derrick. Analysts at BNP Paribas noted that the Aussie dollar has been the "outperformer" at the start of the week, but that with every gain the currency is becoming vulnerable to falls. "We believe that these gains are likely to be short lived. Although some further near-term gains cannot be ruled out, gains above the 0.9150 usd level are viewed as a selling opportunity," they said in a research note. Elsewhere, the euro nudged higher reflecting the market's focus on yield in the absence of other pointers. Interest rates in the euro zone have remained on hold for the time being, while those in other leading economies like the US and the UK are heading lower -- giving the euro a yield advantage. However analysts expect the European Central Bank to change tack at some point in the coming months if economic indicators continue to come in weak -- starting with this week's purchasing managers' indices (PMIs) for the manufacturing and services sectors. Cuts in euro zone interest rates could spark a rout in the euro/ "The eurozone PMIs, especially the services sector PMI, have been on a strong downward trend providing evidence that the eurozone economy is now slowing down," said BNP Paribas analysts.