Dollar lower on fiscal cliff concerns

THE Australian dollar is slightly lower after amid concerns about a lack of progress in US "fiscal cliff" talks.

THE Australian dollar is slightly lower after amid concerns about a lack of progress in US "fiscal cliff" talks.

At 12.00 AEDT on Friday, the currency was trading at 104.28 US cents, down from 104.67 US cents on Thursday afternoon.

CMC foreign exchange strategist Tim Waterer said the currency fell overnight after US House Of Representatives Speaker John Boehner warned no substantive progress had been made in budget talks between Republicans and Democrats.

US politicians are attempting to negotiate measures to bring down the country's budget deficit to avoid a so-called "fiscal cliff' of automatic spending cuts and tax hikes that could drag the world's largest economy back into recession.

"At the moment it seems like we have one day of positive comments and then one day of negative comments (about the negotiations) and that is what is effecting the up and down momentum of risk assets," Mr Waterer said.

"Mr Boehner's comments promoted some buying of the US dollar as a safe haven and, as a consequence, the Australian dollar eased back below that 104.50 (US cent) level."

With no major economic data on Friday, Mr Waterer said the Australian dollar was likely to trade in a narrow range while traders waited for further developments from the fiscal cliff talks during the US session later tonight.

Meanwhile, Australian bond futures prices were higher at noon.

At 1200 AEDT on Friday, the December 10-year bond futures contract was at 96.930 (implying a yield of 3.070 per cent), up from 96.860 (3.140 per cent) on Thursday.

The December three-year bond futures contract was trading at 97.410 (2.600 per cent), up 97.330 (2.670 per cent).