Aust dollar flat at noon

Local currency little changed after surprise fall on upbeat trade balance data.


The Australian dollar is flat after a surprise fall on the back of some encouraging trade data.

At 1200 AEDT, the local unit was trading at 89.46 US cents, almost level with 89.47 cents on Monday afternoon.

The deficit on goods and services was halved, falling to $118 million in November, from 358 million in October, the Australian Bureau of Statistics said on Tuesday.

Easy Forex currency dealer Tony Darvall said the fall was a warning to potential buyers that most traders believe the only way is down for the Australian dollar.

"The warning sign is that when the market gets good data and the immediate reaction is to sell, it's almost as if they're waiting for a little bit of liquidity and buyers to be selling into," he said.

"That's a little bit of a warning for the buyers that are looking for a recovery.

"Unless we get some reason for the US dollar to be weak, then a return to the down trend is quite likely."

Mr Darvall said the main event for markets this week would be the release of December US employment figures, due out on Friday.

He expects the Australian dollar to trade in a range between 89 and 89.60 US cents on Tuesday afternoon.

Meanwhile, the Australian bond market was firmer.

At 1200 AEDT, the March 2014 10-year bond futures contract was trading at 95.705 (implying a yield of 4.295 per cent), up from 95.665 (4.335 per cent) on Monday.

The March 2014 three-year bond futures contract was at 96.930 (3.070 per cent), up from 96.910 (3.090 per cent).

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