Dollar, bonds down on poor data

THE dollar has fallen almost US0.5c following disappointing housing finance data and a soft consumer sentiment survey.

THE dollar has fallen almost US0.5c following disappointing housing finance data and a soft consumer sentiment survey.

At midday (AEDT), the local unit was trading at US100.73c, lower from yesterday's local close of US101.16c.

Since 7am, the dollar has moved between a high of US101.05c and and a low of US100.70c.

The Australian Bureau of Statistics (ABS) reported today that home loans approved in January had fallen 4.5 per cent, to a seasonally adjusted 48,871.

Economists' forecasts had centred on a 0.5 per cent rise in housing finance commitments for the month.

Royal Bank of Scotland foreign exchange strategist Greg Gibbs said the dollar fell slightly following the disappointing data.

"The market was anticipating some softness, given the floods in January," Mr Gibbs said.

"It hasn't had a huge impact, but the currency is softer."

Also today, the Westpac-Melbourne Institute index of consumer sentiment fell to its lowest level in nine months on higher petrol prices and concerns about tax issues.

Mr Gibbs said the local unit reacted negatively to the news.

Tomorrow, the ABS is due to release labour force figures for February.

"That will be important for the direction and that's part of the reason that the currency won't fall too much," Mr Gibbs said.

"I think people are aware that that number may be quite a strong one."

Meanwhile, the local bond market was weaker at noon.

At midday on the ASX 24, the March 10-year bond futures contract price was 94.425 (implying a yield of 5.575 per cent), down from yesterday's close of 94.440 (5.560 per cent).

The March three-year bond futures contract price was 94.880 (5.120 per cent), lower from 94.890 (5.110 per cent).

Westpac senior market strategist Damien McColough said the Australian bond market opened today softer, following a disappointing day for US Treasuries.

"The market has been very much rangebound for some time and I can't imagine that there's anything that would break it out of that today," he said.