Dollar lower on Asian market moves

THE Australian dollar is trading lower, as markets in Asia respond negatively to concerns about the US fiscal cliff.

Australian dollar

THE Australian dollar is trading lower, as markets in Asia respond negatively to concerns about the US fiscal cliff.

At 1200 AEDT on Monday, the local unit was trading at 103.99 US cents, down from 104.25 cents on Friday.

CMC Markets foreign exchange dealer Tim Waterer said regional market weakness had pulled the Aussie dollar down.

"The Australian dollar has dipped below the 104 (US cent) level, mainly due to cautious trading across the Asian region," he said.

"All of the key regional bourses across Asia are in the red at the moment."

However, trading ranges were quite narrow, with few significant moves, he added.

"The market is on-hold at the moment, waiting for any news on the US fiscal cliff," he said.

"That's the theme dominating conversation at the moment, and traders are tentative about taking on any new
positions until we get clarity about what might happen."

The fiscal cliff - a series of US tax rises and spending cuts set to come into play from 2013 - is a major challenge
facing incumbent president Barack Obama, after his election victory last week.

Meanwhile, Australian bond prices were higher at noon.

At 1200 AEDT on Monday, the December 10-year bond futures contract the December 10-year bond futures
contract was trading at 97.005 (implying a yield of 2.995 per cent), up from 96.975 (3.025 per cent) on Friday.

The December three-year bond futures contract was at 97.450 (2.555 per cent), up from 97.430 (2.570 per cent).