Dollar follows stocks higher

A SOLID performance on the local share market has helped push the Australian dollar higher.

Australian dollar coin

A SOLID performance on the local share market has helped push the Australian dollar higher.

At 12pm AEDT today, the currency was trading at 102.28 US cents, up from 101.63 US cents yesterday afternoon.

The currency reached at fresh three-month low of 101.50 US cents late yesterday.

CMC Markets foreign exchange dealer Tim Waterer said there was a feeling in markets the currency, which dropped 3.5 US cents in the week to yesterday, had been oversold recently.

"We've had some bargain hunters come in during the past 24 hours, so it's not really any surprise that we have had that bounce back," he said.

Mr Waterer said the currency had been buoyed by the local share market, with the S&P/ASX200 index opening 0.19 per cent higher today.

"The stock market is higher and some of that has filtered through to the Aussie dollar."

Mr Waterer said the currency was likely to trade in a relatively narrow range until the release of key domestic employment data on Thursday.

"I think there will be a cap on the Aussie dollar until we see how Thursday's employment numbers pan out."

Meanwhile, Australian bond futures prices were lower at noon.

At 12pm AEDT today, the December 10-year bond futures contract trading at 97.010 (implying a yield of 2.990 per cent), down from 97.025 (2.975 per cent).

The December three-year bond futures contract was at 97.620 (2.380 per cent), down from 97.640 (2.360 per cent).