Dollar flat at noon

THE Australian dollar was trading close to 104.6 US cents at noon, after a quiet morning that left the currency stuck in a narrow range.

THE Australian dollar was trading close to 104.6 US cents at noon, after a quiet morning that left the currency stuck in a narrow range.

The lack of movement in morning trade meant the Australian dollar has consolidated strong gains against the euro from the overnight session, when the local unit rose 1.5 per cent against the European currency.

At 12pm AEDT today, the Australian dollar was trading at 104.65 US cents, little changed from yesterday's local close of 104.55 US cents. By contrast, the local unit was at 81.38 euro cents, up sharply from 80.21 euro cents yesterday.

The Australian dollar moved between 104.51 US cents and 104.71 US cents during the morning, with little to guide the currency by way of direction.

Easy Forex senior dealer Francisco Solar said the selling of the euro in response to the crisis in Cyprus, as well as fading prospects of an interest rate cut in Australia, was keeping the local currency buoyant. However, a lack of new information in morning trade left the Australian dollar stuck in a narrow trading range.

"There is nothing really to push the Aussie one way or the other out of this range," Mr Solar said.

During the overnight offshore session, news Cyprus had agreed to major reforms of its banking sector to secure a 10 billion euro bailout package dominated market sentiment. Still to come today, Reserve Bank of Australia governor Glenn Stevens is due to speak at the Australian Securities and Investments Commission annual forum in Sydney.

Meanwhile, the Australian bond market was stronger at noon. At 12pm AEDT, the June 10-year bond futures contract was at 96.415 (implying a yield of 3.585 per cent), up from yesterday's local close of 96.355 (implying a yield of 3.645 per cent). The June three-year bond futures contract was at 96.960 (3.040 per cent), up from 96.920 (3.180 per cent) previously.