THE dollar was lower at noon as investors sought safe haven assets amid continued uncertainty over growth in Europe.
At noon (AEST), the dollar was trading at $US0.8956/60 down 0.7 per cent from yesterday's close of $US0.9020/22.
Since 7am (AEST) today, the local unit has traded between $US0.8933 and $US0.8965.
Easy Forex senior dealer Francisco Solar said concerns over European growth had weakened growth currencies such as the dollar.
"The euro weakness was pretty much the main story there, after it continued to fall, posting a more recent low than we have seen," Mr Solar said.
"It continued falling, posting a new low and threatened to get below $US1.25, and that has dragged other currencies down with it, notably the Aussie dollar."
The "upbeat" domestic employment number yesterday helped to cushion the blow, he said.
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"The Aussie is very much on a weakish footing, as well, so it does look like this negative sentiment surrounding European events is somewhat of an ongoing fear in the markets."
A late sell-off overnight inflicted heavy losses on US stock markets yesterday, with investors spooked by news of a blast in Athens and the spectre of criminal charges against nine banks.
Portugal announced yesterday a fresh austerity package following eurozone partner Spain's lead, aiming to halve its budget deficit by 2011 with a series of tax rises and salary cuts for public servants.
Mr Solar forecast the local currency would trade between $US0.8880 and $US0.8980 today.
"It does look like there seems to be some sort of downward bias in the Aussie dollar and that could continue for the rest of the Asian session," he said.
Meanwhile, the bond market was firmer at noon.
At noon (AEST), the yield on the Commonwealth Government April 2020 bond was 5.508 per cent, down from yesterday's close of 5.533 per cent, while the May 2013 bond was at 5.051 per cent, down from 5.095 per cent.
On the Sydney Futures Exchange, the June 10-year bond futures contract was at 94.475, up from 94.455 yesterday, while the June three-year bond futures contract was 94.880, up from 94.850 yesterday.
Bills ignore ratings agenciesDollar lower at noon, bonds firmer
