Dollar slightly higher, bonds firmer at noon

THE dollar was slightly higher at noon, as renewed risk aversion and falling commodity prices hold rises in check.

THE dollar was slightly higher at noon, as renewed risk aversion and falling commodity prices hold rises in check.

At midday (AEST), the local unit was trading at US104.50c, up from yesterday's local close of 104.4c.

Since 7am, the dollar has traded between a low of US104.29c and a high of US104.91c.

The domestic unit had reached a fresh post-float high of US105.84c on Saturday.

At 10.30am, Westpac and the Melbourne Institute reported that their consumer sentiment index had risen by 1.2 per cent in April to 105.3, following a 2.4 per cent fall in March.

St George senior economist, Jo Heffernan, said the dollar did not move on the data.

"Given some of the weakness we've seen in consumer sentiment recently, it was probably expected to show a bit of a bounce-back," Ms Heffernan said.

The local unit opened lower this morning on renewed risk aversion, she said.

"Also, (there was) quite a steep fall in commodity prices, with the (Commodity Research Bureau) index off 1.9 per cent overnight."

She expected movements in the domestic currency to continue to be dictated by commodity prices.

US retail sales figures, due overnight (AEST), may also give the local unit with some further direction, she said.

The market forecast is for a 0.5 per cent increase in retail sales for March, from a 1 per cent rise in February.

"We're probably starting to see some signs in the US that perhaps the recovery there is stumbling a little bit... some of their consumer sentiment indicators... have surprised the market on the low side.

"So I think people will really be watching those retail sales figures just to see how consumers are holding up."

Meanwhile, the local bond market was firmer at noon.

At noon, the June 10-year bond futures contract was trading at 94.375 (implying a yield of 5.625 per cent), up from 94.360 (5.640 per cent) yesterday.

The June three-year bond futures contract was priced at 94.820 (5.180 per cent), higher from 94.810 (5.190 per cent).