Dollar higher at noon

After slipping in early trade, the dollar has climbed back

The Australian dollar is higher after disappointing gross domestic product (GDP) figures from the US eased investor concerns about the US central bank's possible stimulus wind-down.

At 1200 AEST on Thursday, the local unit was trading at 93.18 US cents, up from 92.80 cents on Wednesday.

The rise came after the release on Wednesday night, AEST, of weaker-than-expected US GDP figures, interpreted by investors as a sign the US Federal Reserve may hold off on reining in its economic stimulus program.

News of the possible stimulus tapering had seen the local currency fall against a surging US dollar.

CMC Markets foreign exchange dealer Tim Waterer said the local currency was being driven higher by international factors including the weak US GDP figures and a rebound in the price of gold.

"Whilst there is a bit of uncertainty on the local political front, that's certainly not hindering the Australian dollar at the moment," Mr Waterer said, referring to Kevin Rudd taking over as prime minister from Julie Gillard.

"The Australian dollar, being a commodity currency, can respond well to movements higher in resource prices and that's also pushing the currency higher.

"The market is feeling a little more at ease about the tapering situation, given the weaker-than-expected US GDP reading.

"The market is, basically, thinking that the Fed may not be forced into tapering sooner than expected. They might have a bit more room to wait if data is coming in on the low side."

Australian bond futures prices are also higher on the back of the weak US data.

At noon, the September 10-year bond futures contract was trading at 96.175 (implying a yield of 3.825 per cent), up from 96.140 (3.860 per cent) on Wednesday.

The September three-year bond futures contract was at 97.150 (2.850 per cent), up from 97.070 (2.930 per cent).

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