Dollar lower in quiet morning trade

THE dollar was US0.5c lower, trading in a tight range in quiet morning trade.

THE dollar was US0.5c lower, trading in a tight range in quiet morning trade.

At midday (AEDT), the local unit was trading at US98.70c, down from yesterday's close of US99.48c.

Since 7am, the local unit traded in a range between US98.60c and US98.70c.

RBC Capital Markets senior currency strategist Sue Trinh said the local unit had been rangebound in morning trade.

"The market has certainly headed into Christmas mode with unusually tight ranges than what we've been accustomed to over the past several weeks during Asian sessions."

She said the dollar was lower after an overnight fall on the back of a good batch of US economic data.

There was a 0.4 per cent rise in US industrial production in November, which has increased 9.8 per cent since its low point of the recession in July 2009.

Ms Trinh said the next market event of interest would be Tuesday's release of the Reserve Bank Australia's (RBA) December board meeting.

"The market will be particularly focused on any forward guidance as to the timing or the pace and magnitude of any future rate rise," she said.

"It's been the trend over the past couple of weeks for analysts to push back the timing for any future rate hike from the first quarter (of 2011) to the second quarter."

Ms Trinh expects the dollar to trade in a range between US98.50c and US98.90c this afternoon.

Meanwhile, the bond market was weaker at noon.

At midday on the ASX 24, the March 10-year bond futures contract was at 94.295 (implying a yield of 5.705 per cent), down from yesterday's close of 94.305 (5.695 per cent).

The March three-year bond futures contract was level with the previous close of 94.670 (5.330 per cent).