Dollar higher near parity on low volumes

THE dollar rose slightly to trade around parity amid thin volumes and low volatility in the lead up to Christmas.

THE dollar rose slightly to trade around parity amid thin volumes and low volatility in the lead up to Christmas.

At midday (today), the local unit was trading at US99.90c, up from yesterday's close of US99.72c, but down slightly from the overnight high of US100.08c.

The currency exceeded $US1 before that on December 14.

Commonwealth Bank chief currency strategist Richard Grace said the local currency was trading in a tight range after touching parity in early morning trade.

"I don't think there's been any major change of story," Mr Grace said.

The local unit was well supported due to low volumes being traded in the lead up to Christmas, he said.

"If volumes and volatility remain low it's always a very positive environment for the Aussie," Mr Grace said.

"Relative economic health drives currencies and the Aussie is looking very good, so we're tending to see the Aussie do well in that environment."

He forecast a fairly quiet afternoon of trade.

"There's no major data out across the China Strait and in New Zealand so we'll see how the Asian stock markets perform."

"I can't see any major catalysts."

The bond market was weaker at midday.

At midday on the ASX 24, the March 10-year bond futures contract was at 94.320 (implying a yield of 5.680 per cent), down from yesterday's close of 94.340 (5.660 per cent).

The March three-year bond futures contract was at 94.610 (5.390 per cent), down from 94.650 (5.350 per cent).