Dollar lower after weak Chinese data

THE dollar is three quarters of a US cent lower after weak manufacturing figures from China.

THE dollar is three quarters of a US cent lower after weak manufacturing figures from China.

At 12pm AEST today, the local unit was trading at 104.34 US cents, down from 105.14 cents yesterday.

Since 7am AEST today, the dollar traded between 104.22 US cents and 104.46 cents.

Easy Forex currency dealer Tony Darvall said there was a sell-off in equities and the dollar last night after China released the lowest manufacturing activity figures in nine months.

He also said the dollar was still weak after the minutes of the US Federal Reserve's most recent policy meeting showed that any more economic stimulus was quite a way off.

"You saw some large profit taking, the biggest fall in US stocks in a month so that hurt the Aussie dollar, but it is being supported by a strong euro and quite strong gold price," Mr Darvall said.

"We've seen most of that selling overnight, so we've got support at 104.00 US cents and resistance at 105.00 US cents."

Mr Darvall said the dollar is stabilising partly because of some comments from the Reserve Bank of Australia (RBA) in testimony to a House of Representatives committee today.

"We also had some talk from RBA governor Glenn Stevens earlier today and it was very neutral, they are not going to intervene in the Aussie dollar and China has got it's slowdown in check.

"All those were mildly supportive so we're not seeing a big sell off here."

Meanwhile, bonds were firmer at noon.

At 12pm AEST today, the September 10-year bond futures contract was trading at 96.815 (implying a yield of 3.185 per cent), up from 96.790 (3.210 per cent) yesterday.

The September three-year bond futures contract was at 97.330 (2.670 per cent), level with its previous local close.