Dollar higher on Capex figures

THE Australian dollar is higher after official figures indicated the mining investment boom might peak later than expected.

THE Australian dollar is higher after official figures indicated the mining investment boom might peak later than expected.

At 12pm AEDT today, the currency was trading at 102.43 US cents, up from 102.16 US yesterday afternoon.

The currency slumped as low as 101.84 US cents early this morning, its lowest point since early October, before recovering as global share markets posted solid gains.

CMC foreign exchange dealer Tim Waterer said the Australian dollar was subdued this morning ahead of the release of official capital expenditure figures.

He said the currency lost around a quarter of a US cent after the Australian Bureau of Statistics figures showed a drop in spending in the December quarter but soon recovered.

"Initially, we had a move lower on the headline figure but it rebounded once people looked deeper into the numbers," Mr Waterer said.

The figures for expected capital spending in the 2013/14 financial year indicate the mining investment boom will peak later than expected.

Mr Waterer said those better-than-expected figures prompted the currency's participation in a rally of risk assets underway during the Asian session.

"Leading into the numbers, there was a fear it could be a bit of a disappointing result. But, what eventuated wasn't terribly great but certainly didn't justify any further weakness in the currency," he said. "The fact it wasn't as bad as it could have been has allowed the Australian dollar to progress higher, with other risk sensitive currencies."

He said the Australian dollar would likely continue to move higher this afternoon and evening.

Meanwhile, Australian bond futures prices were lower at noon. At 12pm AEDT today, the March 10-year bond futures contract was trading at 96.665 (implying a yield of 3.335 per cent), down from 96.690 (3.310 per cent) today. The March three-year bond futures contract was at 97.260 (2.740 per cent), down from 97.290 (2.710 per cent).