Dollar higher as Queensland floods ease

THE dollar was higher at noon today after the unit was dragged higher by the Euro, and as investors continued to worry about the Queensland floods.

THE dollar was higher at noon today after the unit was dragged higher by the Euro, and as investors continued to worry about the Queensland floods.

At midday (AEDT), the local unit was trading at US99.69c, up from US99.52c today.

Since 7am, the dollar traded between US99.94c and US99.64c.

Rochford Capital senior consultant for FX services, Derek Mumford, said the local unit followed the euro higher as it gained against the US dollar overnight.

But he added investors were still nervous about the Queensland floods.

"It was dragged up by the euro and a little bit of US dollar weakness," he said.

"The Queensland floods subsiding has helped that situation.

"There's (a bit) of uncertainty that will undermine the Aussie over the next of weeks."

Extreme weather has decimated the Sunshine state over the past month, with the state's capital city, Brisbane, seeing parts of its central business district flooded.

While flooding has subsided somewhat in Brisbane, outlying regions of the state are still facing high levels of flooding and extreme weather.

Mr Mumford said he did not expect the unit would breach its recent high of US102.50c for some time.

He said if the unit does breach parity with the US dollar in the coming weeks, it would quickly drop back into the US90c region as investors take profit.

Meanwhile, at 12pm on the March 10-year bond futures contract price was 94.445 (implying a yield of 5.555 per cent), up from yesterday's close of 94.415 (5.585 per cent).

The March three-year bond futures contract price was 94.870 (5.130 per cent), up from 94.860 (5.140 per cent).