Dollar stronger after brief dip

THE dollar was higher at noon, after dipping briefly on concerns the central bank has softened its outlook for domestic interest rates.

THE dollar was higher at noon, after dipping briefly on concerns the central bank has softened its outlook for domestic interest rates.

At 12pm AEST yesterday, the dollar was trading at 106.33 US cents, up from from 106.00 US cents at close yesterday.

Since 5pm AEST yesterday, the local unit traded between 106.02 US cents and 106.51 US cents, according to IRESS data.

The Reserve Bank of Australia's (RBA) July board meeting minutes, published today, show the central bank felt it "prudent" to spend more time assessing economic data for the "likely strength of inflationary pressures in Australia".

The board left the cash rate unchanged at 4.75 per cent in July.

JP Morgan economist Helen Kevans said the dollar, which has been on a steady upward march since opening the domestic session, had barely reacted.

"We didn't see a huge movement in the currency that we would attribute to any change of tone in the minutes," Ms Kevans said.

The outlook still was for further rate rises, although any worsening of the debt crisis in Europe or the US could force the RBA to hold rates for the remainder of the year.

The RBA would look to the consumer price index (CPI) for June, due next Wednesday, as a factor in deciding on the future movement of interest rates.

Meanwhile, bond futures were little changed.

At 12pm AEST, the September 10-year bond futures contract was trading at 95.105 (implying a yield of 4.895 per cent), up from 95.095 (4.905) yesterday.

The September three-year bond futures contract was at 95.680 (4.320 per cent), down from 95.690 (4.310 per cent).