Dollar trading higher

THE Australian dollar is more than one US cent higher following the release of disappointing US manufacturing figures.

Australian dollar

THE Australian dollar is remains higher, despite losing some ground following the release of current account figures.

At 12pm AEST today, the currency was at 97.37 US cents, up from 96.46 cents yesterday afternoon.

The Australian dollar reached a high of 97.73 US cents during the morning session before losing ground.

ANZ Foreign Exchange Strategist Andrew Salter said the currency fell following the release of current account data for the March quarter.

He said the figures, showing a lower-than-expected current account deficit and stronger-than-anticipated growth in exports should have been positive for the Australian dollar.

"But, as sometimes happens in foreign exchange trading, we went the other way," he said.

Mr Salter said the most Asian currencies had weakened during the morning so the fall in the Australian dollar was likely part of a broader move.

He said the key event for the currency this afternoon would be the Reserve Bank of Australia's monthly interest rate decision at 2.30pm AEST.

The RBA is widely expected to keep the cash rate on hold at 2.75 per cent. Meanwhile, bond futures prices were mixed at noon.

At 12pm AEST today, the June 10-year bond futures contract was trading at 96.575 (implying a yield of 3.425 per cent), the same level as yesterday afternoon. The June three-year bond futures contract was at 97.350 (2.650 per cent), down from 97.360 (2.640 per cent).