Australian dollar higher after mixed US data

THE Australian dollar was higher at noon, as thin trading conditions and mixed US data saw investors dump the US dollar.

THE Australian dollar was higher at noon, as thin trading conditions and mixed US data saw investors dump the US dollar.

At 12pm AEDT, the local unit was trading at 100.37 US cents, up from 99.84 cents on yesterday.

Since 7am AEDT, the Australian dollar traded between 100.20 cents and 100.44 US cents.

CMC Markets foreign exchange dealer Tim Waterer said the unit had been lifted in the wake of mixed US data and thin trading conditions.

"We saw the US dollar come off the boil overnight with offshore stocks trading in a positive fashion," he said.

"Those events lent themselves to the risk trade. Some of the data was good, some bad."

Industrial production in the US decreased 0.1 per cent in January 2011 after having risen 1.2 per cent in December, Bloomberg reported overnight.

In the manufacturing sector, output increased 0.3 per cent in January after an upwardly revised gain of 0.9 per cent in December.

Meanwhile, US producer prices rose in the US in January, the Labor department said.

The producer price index increased 0.8 per cent last month.

A 6.9 per cent jump in gas prices pushed the index up. Food prices rose only 0.3 per cent, less than many economists forecast.

Mr Waterer said those figures, coupled with thin trading conditions, gave the Australian dollar a strong boost at the start of domestic trade.

"It jumped about 30 pips (one third of a US cent)," he said.

With no market moving data due during the rest of the domestic session, Mr Waterer said he expected the unit to trade between 99.95 US cents and 100.65 cents.

Meanwhile, the Australian bond market was firmer at noon.

At 12pm AEDT today on the ASX 24, the March 10-year bond futures contract price was 94.300 (implying a yield of 5.700 per cent), up from Wednesday's close of 94.275 (5.725 per cent).

The March three-year bond futures contract price was at 94.740 (5.260 per cent), up from 94.730 (5.270 per cent).