Dollar higher ahead of Chinese data

THE Australian dollar is higher ahead of crucial Chinese growth data.

THE Australian dollar is higher ahead of crucial Chinese growth data.

At 12pm AEDT today, the currency was trading at 103.73 US cents, up from 103.13 US cents.

IG Markets institutional trader Chris Weston said Chinese data - including June quarter gross domestic product (GDP), and industrial production - would be the key events today, with the market anticipating some strength in the GDP numbers.

"Premier Wen was speaking yesterday, and he has suggested that the numbers are going to be okay, with some upside risk from the 7.4 per cent consensus," he said. "I think we're likely to see the Aussie dollar push up to 104 US cents or even 105 cents."

Mr Weston said a number of factors were providing support to the Aussie dollar.

"The iron ore price is stabilising nicely, and the headwinds in Spain and Europe, generally, look like they're coming to a head.

"We're also seeing signs of stabilisation in Asia. The export numbers in Korea, Taiwan and China and money supply numbers in China are all very strong."

On Tuesday night, ratings agency Moody's announced it would keep Spain's credit rating at BAA3, quashing expectations it would downgrade it to junk status.

Meanwhile, Australian bond futures prices are lower. At 12pm AEDT today, the December 10-year bond futures contract was trading at 96.875 (implying a yield of 3.125 per cent), down from 96.965 (3.035 per cent). The three-year bond futures contract was at 97.470 (2.530 per cent), down from 97.550 (2.450 per cent).