Budget fails to dent Aussie dollar

The Australian dollar has remained unchanged by the release of the Federal Budget.

The Australian dollar has remained unchanged by the release of the federal budget.

At 1928 AEST, shortly before Treasurer Wayne Swan released the budget, the Australian dollar was trading at 99.75 US cents. The currency remained at 99.75 US cents when the budget was released at 1930 AEST.

EARLIER: At 12pm AEST today, the Australian dollar was trading at 99.77 cents, down almost a quarter of a US cent from yesterday's close of 100 US cents.

The local unit fell last night, and continued to struggle this morning, after US Commerce Department data showed a retail sales jump of 0.1 per cent during April. While the rise was unspectacular, it was more upbeat than market forecasts of a 0.3 per cent drop, boosting the US dollar against most major currencies.

"At the moment, the market's quite sensitive to any sort of positive US news," OzForex chief currency strategist Jim Vrondas said. "We've seen them get long buying US dollars."

Still, Mr Vrondas said, the Australian dollar could briefly rise above parity with the US currency, to 101 US cents tonight, if Treasurer Wayne Swan's sixth budget is less draconian than financial markets expect.

"The expectations are it's going to be relatively tough, but maybe not as tough," he said, adding that traders would "sell on a rally" if the Australian dollar rose above 100 US cents.

The market has overlooked lending finance data for March, showing a 5.8 per cent rise in owner-occupier home loans.

Meanwhile, the Australian bond market was firmer at noon. At 12pm AEST today, the June 10-year bond futures contract was trading at 96.775 (implying a yield of 3.225 per cent), up from 96.750 (3.250 per cent) yesterday. The June three-year bond futures contract was at 97.440 (2.560 per cent), up from 97.410 (2.590 per cent) previously.