Dollar lower in lacklustre trade

THE Australian dollar has had a quiet morning of trade but is still lower due to an overnight fall on the back of some weak Chinese and US data.

THE Australian dollar has had a quiet morning of trade but is still lower due to an overnight fall on the back of some weak Chinese and US data.

At 12pm AEST today, the local unit was trading at 105.56 US cents, down from 106.00 cents yesterday.

Easy Forex senior dealer Francisco Solar said the Australian dollar was slightly off after a pullback overnight.

"After the Chinese numbers, industrial production numbers came in a little bit weaker than expected," Mr Solar said.

"That was coupled with the fact that we had US data as well, which gave the US dollar a little bit of strength that was much better expressed against a weak currency like the euro."

Mr Solar said the Australian dollar did not react much to the release of the Reserve Bank of Australia's (RBA) Statement on Monetary Policy, released late this morning.

"There were some positives you could take from it, like the fact that they revised up 2012 economic growth forecasts to 3.5 per cent from three per cent," he said.

"But they didn't have a mention there of the high Australian dollar and I think that's where a lot of the market's focus is going start shifting.

"Having said that, there is nothing really to move the Aussie one way or the other during the morning session."

Mr Solar said the market was now awaiting the release of Chinese international trade data for July, expected to be out late this afternoon.

There is also a belief among traders that over the weekend the Chinese central bank could lower its reserve requirement ratio (triple R) for commercial banks - the equivalent of an interest rate cut.

Meanwhile, the Australian bond market is firmer.

At 12pm AEST today, the September 10-year bond futures contract was trading at 96.780 (implying a yield of 3.220 per cent), up from 96.755 (3.245 per cent) yesterday.

The September three-year bond futures contract was at 97.240 (2.760 per cent), up from 97.180 (2.820 per cent).