Dollar down on Euro worries

THE Australian dollar has fallen on continued concerns around the euro zone.

At 12pm AEST today, the currency was trading at 100.54 US cents, down from 101.18 cents yesterday.

Since 7pm AEST it has traded between 100.44 US cents and 100.83 US cents.

Nomura head of foreign exchange Kurt Magnus said Greece's political situation continued to plague the market, with investors leaving the euro in favour of US dollars.

"The euro is close to yearly lows, and is looking very vulnerable going into the weekend, while it's trading below 1.2950 (US dollars)," he said.

"While the euro's being sold, the US dollar is being bought, as a safe-haven at the moment, and that's evident in the DXY (US dollar index).

"The DXY has just hit a high of 80.3 - I think it can get back to 81.5 because the euro has closed under 1.295."

Mr Magnus said the trend would continue until there was some clear news of a pending election, or formation of government in Greece.

"It's completely the uncertainty of the Greek scenario - it's a lack of news," he said.

"While uncertainty remains over the weekend, investors are going to continue to move into US dollars, and actively sell the euro."

Yesterday, the Australian dollar rose on better than expected employment figures, which showed an increase of 15,000 jobs in April.

Meanwhile, Australian bond future prices were mixed at noon.

At 12pm AEST today, the June 10-year bond futures contract was trading at 96.695 (implying a yield of 3.305 per cent), down from 96.710 (3.290 per cent).

The June three-year bond futures contract was at 97.300 (2.700 per cent), up from 97.290 (2.710 per cent). 

www.news.com.au