Dollar lower despite market recovery

THE dollar was lower at noon, despite recovering some losses after a dramatic session sparked by fears of nuclear meltdown in Japan.

THE dollar was lower at noon, despite recovering some losses after a dramatic overnight session sparked by fears of nuclear meltdown in Japan.

At midday (AEDT), the dollar was trading at US99.47c, down from yesterday's local close of US99.74c.

Since 7am, it traded between a low of US99.50c and a high of US98.83c.

CMC currency strategist Tim Waterer said the unit had recovered its losses after hitting a low of US98.20c overnight.

Share markets plunged into the red yesterday with news that the nuclear power crisis in Japan had escalated.

"Today we have seen the Aussie more than one cent off its lows," Mr Waterer said.

"Last night the Aussie was sold off and we had commodity prices coming off the boil as well.

"It's fair to say the Aussie dollar, being a risk asset, fared among the worst."

The Australian share market rose during Wednesday's trading day, however commodity prices were still in the red.

At midday the benchmark S&P/ASX200 index was up 1.12 per cent, at 4579.4 points, while the broader All Ordinaries index was up 1.15 per cent, at 4662.7 points.

In Tokyo, shares are up 6.23 per cent on bargain hunting following the biggest two-day sell-off on the Nikkei index for 24 years on fears of the threat of nuclear meltdown after a huge earthquake.

Australian shares were also hit yesterday, falling to a six-month low following more explosions at Japan's Fukushima No.1 nuclear reactor in the nation's north-east.

Yesterday's blasts occurred at buildings housing the No.1, 2 and 3 reactors and their containment vessels, after cooling systems were knocked out by the quake's tsunami.

Plant operator Tokyo Electric says the explosions were of chemical origin and probably occurred when very high temperatures in the reactor split hydrogen atoms from the surrounding water, causing the flammable gas to build up.

Japan has been rolling from crisis to crisis since Friday's 9 magnitude earthquake caused a series of tsunamis to hit the island nation.

Meanwhile, the local bond market was mixed.

At midday on the ASX 24, the June 10-year bond futures contract price was 94.565 (5.435 per cent), down slightly from yesterday's close of 94.580 (5.420 per cent).

The June three-year bond futures contract was trading at 95.040 (implying a yield of 4.960 per cent), down from yesterday's close of 95.090 (4.910 per cent).