Dollar rises as gold price stabilises

THE Australian dollar is slightly higher after the release of good US economic figures and the gold price stopped falling.

THE Australian dollar is slightly higher after the release of good US economic figures and the gold price stopped falling.

At 1200 AEST today, the local unit was trading at 103.80 US cents, up from 103.72 cents yesterday.

During the local session on Wednesday morning, the currency peaked at 103.96 US cents.

CMC markets foreign exchange dealer Tim Waterer said share markets and currencies are getting back to normality after big falls earlier in the week.

"It's hard to determine what is the most important factor," he said.

"With gold having fallen $US200 in two trading days, it was starting to take on a oversold appearance."

He said the stabilisation of the gold prices and some good US economic data paved the way for US stocks to rebound and gave the Australian dollar a boost.

US housing starts rose in March, coming close to a five-year high, while industrial production in March was stronger than expected.

Mr Waterer said a further rise in the Australian dollar will be dependant on how overseas sharemarkets perform tonight.

"I think it is very much an international story rather than any domestic rumblings for the Australian dollar."

He expects the currency to trade in a range between 103.20 US cents and 103.95 cents today.

Meanwhile, the Australian bond market was weaker at noon.

At 1200 AEST on Wednesday, the June 10-year bond futures contract was trading at 96.745 (implying a yield of 3.255 per cent), down from 96.750 (3.250 per cent) yesterday.

The June three-year bond futures contract was at 97.280 (2.720 per cent), down from 97.290 (2.710 per cent).