Dollar trades at 97 cents

Dollar trades at 97 cents

UPDATE: THE Aussie dollar is slightly lower, trading in a tight range throughout the morning, ahead of the release of Chinese economic data.

At noon, the dollar was trading at 97.56 US cents, down from 97.74 cents yesterday.

Last night, the Australian dollar fell as low as 96.90 US cents, its lowest level since November 28.

CMC markets foreign exchange dealer Tim Waterer said there was not much of a reaction in currency markets after a summit of EU leaders ended.

The meeting showed that France and Germany are divided on how to resolve the euro zone debt crisis, particularly on the issue of the European Central Bank issuing its own eurobonds.

"We had a marginal rise in Asian equity markets, which is helping support the currency," Mr Waterer said.

"We're still having no buying impetus for the currency today, that may come if we happen to get a good reading in the Chinese PMI."

This afternoon, the May HSBC purchasing managers index from China will be released.

"Given the market is still very much risk averse due to the situation in Europe, if that number is below expectations tha t could send the Aussie retreating towards the 97.00 cents," he said.

Meanwhile, the Australian bond market was stronger at noon.

At noon, the June 10-year bond futures contract was trading at 96.915 (implying a yield of 3.085 per cent), up from 96.890 (3.110 per cent) yesterday.

The June three-year bond futures contract was at 97.630 (2.370 per cent), up from 97.620 (2.380 per cent).

In overnight trade, early on Thursday morning, the three-year contract hit an all-time high of 97.700.

ForexNews.com