Dollar higher as traders await RBA speech

THE dollar was more than a third of a US cent firmer at noon (AEST), as the market awaits a speech from the Governor of the RBA.

THE dollar was more than a third of a US cent firmer at noon (AEST), as the market awaits a speech from the Governor of the Reserve Bank of Australia.

At midday today, the dollar was trading at US106.73c, up from US106.35c yesterday.

Since 7am, the local unit traded between US106.59c and US106.94c.

Today, Westpac-Melbourne Institute reported that its Index of Consumer Sentiment had fallen by 2.6 per cent in June to 101.2, down from 103.9 in May. This was the lowest level for the index since June 2009.

RBC Capital Markets senior economist Su-Lin Ong said the Australian dollar fell slightly following the survey's release at 10.30am.

"Confidence has generally been declining since late last year," Ms Ong said.

"We're still above the long-run average, but only just."

She said currency traders were marking time until the central bank Governor Glenn Stevens delivers a speech in Brisbane at 1pm (AEST).

"That's really going to be the key for markets for the day.

"We think the currency may get a little bit of support from the Governor, given the title of his speech: 'Economic Conditions and Prospects'.

"I think he will highlight the medium term positive story for the Australian economy and the currency may find a little bit of support from that."

Meanwhile, the bond market was softer at noon.

At noon, the June 10-year bond futures contract was trading at 94.750 (implying a yield of 5.250 per cent), down from 94.810 (5.190 per cent) yesterday.

The June three-year bond futures contract was at 94.135 (4.865 per cent), down from 95.195 (4.805 per cent).