Dollar higher at noon

THE Australian dollar is higher but trading in a narrow range ahead of the release of Chinese economic data.

THE Australian dollar is higher but trading in a narrow range ahead of the release of Chinese economic data.

At 12pm AEDT today, the Australian dollar was at 105.40 US cents, up from yesterday's local close of 105.10 US cents.

Since 7am AEDT, the local currency has traded between 105.38 and 105.53 US cents. It climbed 0.3 US cents during the overnight offshore session, as markets reacted to encouraging US jobs and housing data. But, trading was quiet during this morning, as investors awaited Chinese economic growth figures due out at 1pm AEDT.

Chinese gross domestic product (GDP) is expected to have expanded 7.7 per cent in the year to the December quarter. China was also due to publish retail sales and industrial production data for December.

"The market is positioning and waiting for the Chinese data," ANZ foreign exchange strategist Andrew Salter said. "A positive surprise will benefit the Aussie dollar and a negative surprise will probably see it fall."

During the morning, the local currency rose almost one cent against the New Zealand dollar after inflation data from across the Tasman came out weaker than expected. The Australian dollar reached 126.17 NZ cents after Statistics New Zealand said consumer prices fell 0.2 per cent in the December quarter, from 125.29 NZ cents shortly before the data was released. Economists had expected an 0.1 per cent increase in the New Zealand consumer price index.

Meanwhile, the Australian bond market was weaker at noon. At 12pm AEDT today, the March 10-year bond futures contract was trading at 96.635 (implying a yield of 3.365 per cent), down from yesterday's close of 96.735 (3.265 per cent). The March three-year bond futures contract was at 97.220 (implying a yield of 2.780 per cent), down from 97.310 (2.690 per cent) previously.