Dollar up on global market movements

THE Australian dollar has moved higher, in line with market moves in the US and Europe.

EU, ECB headquarters

THE Australian dollar has moved higher, in line with market moves in the US and Europe.

At 12pm AEST today, the dollar was trading at 103.14 US cents, up from 102.42 yesterday.

CMC foreign exchange dealer Tim Waterer said the local currency had followed the US market higher overnight.

"We had three days of triple-digit declines on Wall Street, so we were due to see a bounce soon enough," he said.

"The Australian dollar was just following suit in terms of what happened with the Dow Jones industrial average.

"Comments from an ECB (European Central Bank) policy maker regarding the possibility of the ESM (European Stability Fund) gaining a banking licence also gave a bit of support to markets."

ECB council member Ewald Nowotny said on Wednesday (European time) that if the ESM obtained a licence, it could borrow funds from the ECB to help bailout weak euro zone countries.

Mr Waterer said markets were looking around for any optimistic developments, after days of negative sentiment, particularly around the euro zone.

Meanwhile, Australian bond prices were lower at noon.

At 12pm AEST today, the September 10-year bond futures contract was trading at 97.265 (implying a yield of 2.735 per cent), down from 97.310 (2.690 per cent) yesterday.

The September three-year bond futures contract was trading at 97.820 (2.180 per cent), down from 97.890 (2.110 per cent).