Weak global forecasts keep dollar down

WEAKER global forecasts and a stronger US currency has kept the dollar lower ahead of crucial jobs data.

World stock market indices

WEAKER global forecasts and a stronger US currency has kept the dollar lower ahead of crucial jobs data.

At 12pm AEDT today, the currency was trading at 102.01 US cents, down from 102.31 US cents at yesterday's close. The currency reached at fresh three-month low of 101.50 US cents late on Monday, and fell as low as 101.75 cents last night.

CMC foreign exchange dealer Tim Waterer said lowered forecasts for global growth from the International Monetary Fund (IMF) had kicked off a rise in the US dollar, weakening the Aussie currency.

"The theme for markets in the last 24 hours has been this IMF global growth downgrade," he said. "That has contributed to some renewed US dollar strength, although the Australian dollar has held it's ground quite well, and hasn't fallen as much as some other currencies.

"I think that's in part due to a rise in the iron ore price, which has gone up quite a bit - it's gone up about $12 in about two days."

The IMF yesterday lowered its 2012 forecast to 3.3 per cent, from 3.5 per cent, and its 2013 expectation to 3.6 per cent, from 3.9 per cent.

Mr Waterer said the iron ore price rise had kept the dollar sitting above 101.50 US cents. It was hovering close to 102 cents as investors looked ahead to domestic jobs data tomorrow.

The Australian Bureau of Statistics (ABS) is due to release September labour force figures tomorrow, and an AAP survey of 17 economists shows the median is expecting unemployment to rise to 5.2 per cent, from 5.1 per cent in August.

Meanwhile, Australian three-year bond futures prices were lower at noon. At 12pm AEDT today, the December three-year bond futures contract was at 97.640 (2.360 per cent), down from 97.650 (2.350 per cent) at yesterday's close. The December 10-year bond futures contract was trading at 97.040 (implying a yield of 2.960 per cent), up from 97.030 (2.970 per cent).