Dollar higher after RBA speech

THE Australian dollar was higher at noon, after the Reserve Bank of Australia gave an upbeat assessment of the country's financial system.

THE Australian dollar was higher at noon, after the Reserve Bank of Australia gave an upbeat assessment of the country's financial system.

At 1200 AEST today, the Australian dollar was trading at 104.80 US cents, up from 104.56 cents yesterday.

Since 0700 (AEST) today, the local unit traded between 104.19 US cents and 105.03 cents.

Commonwealth Bank chief currency strategist Richard Grace said the dollar had lifted following comments on Friday from RBA governor Glenn Stevens.

Mr Stevens addressed the House of Representatives Standing Committee on Economics on a broad range of issues and indicated that the central bank had no urgent desire to trim the official cash rate. "The RBA indicated they would not consider altering monetary policy in response to volatility, that they are still somewhat concerned about inflation, and that they are still pretty optimistic on the health of the Australian economy," Mr Grace said.

"It's perhaps changed the minds of some participants who thought that the RBA was leaning towards an easing bias."

Meanwhile, the Australian bond market was mixed at noon.

At 1200 AEST today, the September 10-year bond futures contract was trading at 95.585 (implying a yield of 4.415 per cent), up from 95.565 (4.435 per cent) yesterday.

The September three-year bond futures contract was at 96.150 (3.850 per cent), down from 96.170 (3.830 per cent).