Dollar up on good US manufacturing data

THE dollar was higher at noon, as investors were encouraged by good US economic data.

THE dollar was higher at noon (AEDT), as investors were encouraged by good US economic data.

At midday, the local unit was trading at US101.16c, up from US100.30c yesterday.

Since 7am, the dollar has traded between US101.09c and US101.24c.

Nomura chief economist Stephen Roberts said the local unit started the trading day on a strong footing, but had failed to move out of its tight range.

Overnight, the Federal Reserve Bank of Philadelphia said its index of manufacturing in the mid-Atlantic region nearly doubled between January and February.

The surge in manufacturing was enough to offset a Labor Department report that applications for unemployment benefits rose 25,000 from the previous week.

Mr Roberts said this gave the dollar a decent boost overnight.

"Data out of the US is still very growth friendly," he said.

"Growth factors, at the moment, are on the ascendancy."

It was also pleasing to see the local unit escaping relatively unscathed from recent turmoil in the Middle East, Mr Roberts said.

"Geopolitical events in that region haven't had the normal effect of driving up the US dollar," he said.

"Instead, there's good support for commodities, equities and the Australia dollar."

He expected the domestic unit to trade within its narrow range for the remaining session today.

Meanwhile, the bond market was firmer at noon.

At midday today on the ASX 24, the March 10-year bond futures contract price was 94.335 (implying a yield of 5.665 per cent), up from yesterday's close of 94.300 (5.700 per cent).

The March three-year bond futures contract price was at 94.760 (5.240 per cent), little changed from its previous close of 94.750 (5.250 per cent).