Dollar down as markets tumble

THE Australian dollar is 0.7 of a US cent lower as global stock markets continue to fall.

THE Australian dollar is 0.7 of a US cent lower as global stock markets continue to fall.

At 1200 AEDT today, the Australian dollar was trading at 103.62 US cents, down from 104.35 cents yesterday.

St George chief economist Hans Kunnen said the currency's fall mirrored the performance of resource stocks on Thursday as pessimism spread through global markets.

Miners Fortescue, BHP Billiton and Rio Tinto were all trading lower at noon, helping to drag the ASX200 into negative territory at noon.

"There is clearly some uncertainty about global economic growth that is being fed through to the stock market through resources and to the currency as well,'' he said.

Stock markets in Europe and New York fell overnight and the negative sentiment spilled over into Asian markets on Thursday with Japan's Nikkei down 0.61 per cent at noon.

However, Mr Kunnen said, the Australian dollar could turn around later on Thursday as investors took advantage of its relatively low level.

"I think, given the pace of the decline this morning, it may have a firmer afternoon if people re-assess their views that the world is not stopping to spin.''

Meanwhile, Australian bond futures were higher at noon.

At 1200 AEDT on Thursday, the June 10-year bond futures contract was trading at 95.925 (implying a yield of 4.075 per cent), up from Wednesday's close at 95.855 (4.145 per cent).

The June three-year bond futures contract was at 96.500 (3.500 per cent), from 96.400 (3.600 per cent).