Dollar rebounds slightly but still weak

REBOUND in domestic business confidence lifts dollar from earlier lows but remains weak as investors shift focus towards other assets.

A REBOUND in domestic business confidence has lifted the Australian dollar from its earlier lows but it remains weak as investors shift their focus towards other risk assets.

At 12pm AEDT today, the Australian dollar was trading at 104.34 US cents down from 104.49 US cents on Friday.

The currency fell to 103.85 US cents last night, its lowest level since January 1.

ANZ foreign exchange strategist Andrew Salter said demand for the currency had weakened in the past few days as traders shifted their focus towards higher risk assets and the euro currency amid and improved global economic outlook.

"There is a general trend in foreign exchange markets at the moment for an unwind of global safe-haven conditions and the Aussie dollar, as a quasi safe-haven currency over the last year, is under pressure somewhat as a result of that," Mr Salter said.

Mr Salter said the Australian dollar had received a boost following the release of National Australia Bank's monthly business survey, at 11.30am AEDT today, which showed an improvement in confidence.

He said the lift in confidence would provide support for the currency during the afternoon session.

At 12pm AEDT today, the March 10-year bond futures contract was trading at 96.540 (implying a yield of 3.460 per cent), down from Friday's close of 96.705 (3.295 per cent).

The March three-year bond futures contract was at 97.150 (2.850 per cent), down from 97.290 (2.710 per cent).