Dollar lower ahead of FOMC minutes

THE dollar has backed away from a previous high above 105 US cents, ahead of an important central bank release in the US.

THE dollar has backed away from a previous high above 105 US cents, ahead of an important central bank release in the US.

At 12pm AEST today, the local unit was trading at 104.44 US cents, down from from 104.93 cents at yesterday's close.

OzForex foreign exchange dealer Carly Pickering said global factors were the main influence on the Aussie currency, ahead of an important release from the US Federal Open Market Committee (FOMC) tonight.

"The Greenback's strengthened recently on the market's expectation that there's a reduced case for quantitative easing (QE3)," she said.

"I think there's a risk that the minutes are going to support that, based on some of the data that's been coming through, which has been better than expected.

"That's bringing the Australian off slightly."

Ms Pickering said meetings between European leaders would become increasingly important towards the end of the week.

"(German chancellor Angela) Merkel and (French prime minister Francois) Hollande are meeting tomorrow, and the Greek prime minister (Antonis Samaras) is looking to meet both of them on the weekend," she said.

"I think markets are a bit scared that this might put a question mark over Greece's membership within the euro, and how they're going to support debt levels."

Meanwhile, bonds were higher at noon.

At 12pm AEST today, the September 10-year bond futures contract was trading at 96.710 (3.290 per cent), up from 96.630 (3.370 per cent) at yesterday's close.

The September three-year bond futures contract was trading at 97.240 (2.760 per cent), up from 97.150 (2.850 per cent).