Dollar falls after Slovak vote, Alcoa result

THE Australian dollar is half a US cent lower after Slovakia rejected changes to the Eurozone bailout fund and US-based aluminum producer Alcoa posted some disappointing earning results.

THE Australian dollar is half a US cent lower after Slovakia rejected changes to the Eurozone bailout fund and US-based aluminum producer Alcoa posted some disappointing earning results.

At midday (AEDT) today, the Australian dollar was trading at 99.20 US cents, down from 99.72 cents yesterday.

Since 7.00am (AEDT) on today, the local unit traded between 99.15 US cents and 99.65 cents.

On this morning (local time), Slovakian politicians voted against a revamp to the Eurozone bailout fund but the country's leaders said they would try to pass the bill in a another vote at a time and date yet to be announced.

The 16 other eurozone members have approved the changes to the bailout fund which requires the backing of all 17 eurozone countries.

After Wall Street closed, Alcoa announced a third-quarter net income of $US172 million ($173.27 million), or 15 cents per share for the quarter.

The results were weaker than the second-quarter numbers and analysts' forecasts.

CMC Markets foreign exchange dealer Tim Waterer said these two factors shifted market sentiment and pushed down Asian stockmarkets and the Australian dollar.

"The market is interpreting that as a reason to unwind some of the upward movement that we've seen in the past several session," he said.

"In terms of which one is more prominent, I'd say it's the Slovak vote.

"Overall, I don't think it is a massive setback, but traders are taking it as an excuse to lock in some gains from the past week of trading."

Mr Waterer said the market would focus on any developments on the Slovakian vote, along with employment data to be released by the Australian Bureau of Statistics tomorrow.

Economists expect to the figures show 10,000 jobs had been added to the economy in September and that the unemployment rate will stay steady at 5.3 per cent.

"I think you'll see a bit of downside risk in the Australian dollar heading into that release," Mr Water said.

"There is a chance of a poor result and that could put a lid on the Australian dollar's momentum."

Mr Waterer said he expected the Australian dollar to trade in a range between 98.80 US cents and 99.30 US cents today.

He said the Australian dollar could fall below this range if the Asian equities fall.

Meanwhile, the Australian bond market was mostly firmer at noon.

At midday (AEDT) today, the December 10-year bond futures contract was trading at 95.635 (implying a yield of 4.365 per cent), down from 95.640 (4.360 per cent) yesterday.

The December three-year bond futures contract was at 96.300 (3.700 per cent), up from 96.280 (3.720 per cent).