THE dollar was US1c lower at noon as ongoing concerns about the global economy weakened demand for growth assets such as equities and commodity-driven currencies.
At noon (AEST), thedollar was trading at $US0.8352/55, down 1.24 per cent from yesterday's close of $US0.8456/61.
From 7am, the local unit traded between $US0.8317 and $US0.8403.
Royal Bank of Scotland foreign exchange strategist Greg Gibbs said the dollar was following the direction on weaker equity markets in Asia today.
Australia's benchmark S&P/ASX200 index was down 0.03 per cent by midday, while Japan's Nikkei-225 index was 1.35 per cent lower.
"It is coming down with equity markets on further concerns developing over the global economy," Mr Gibbs said.
"Concerns over those economies (the US and Europe) and also recent evidence of a slowing in the Chinese economy, while commodity prices have been softer.
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"I'm viewing it as a continuation of the trend we saw last week."
The local currency received some support following stronger than expected trade data, but the lift was short-lived, Mr Gibbs said.
"It did for a short time but now it is drifting a little bit lower," he said.
Australia's trade surplus was $1.645 billion in May, seasonally adjusted, greater than the market median forecast for a surplus of $500 million.
April's trade surplus was revised higher to $1.123 billion from the original estimate of $134 million, an increase of $989 million.
Mr Gibbs said financial markets were awaiting the statement following the Reserve Bank of Australia's (RBA) decision on interest rates at 2.30pm today.
All 16 economists surveyed by AAP forecast the central bank to leave the cash interest rate at 4.5 per cent for a second straight month.
"The markets are a little bit biased towards expecting something dovish," he said.
"The risk is they could be disappointed and provide some support for the currency."
For the rest of the Asian session, Mr Gibbs forecast the dollar to trade between $US0.8280 and $US0.8410 today.
Meanwhile, the Australian bond market was firmer at noon.
Atmidday, the yield on the Commonwealth Government April 2020 bond was 5.026 per cent, down from yesterday's close of 5.062 per cent, while the May 2013 bond was at 4.402 per cent, down from 4.426 per cent.
On the Sydney Futures Exchange the September 10-year bond futures contract was at 94.955, up from yesterday's close of 94.925, while the September three-year bond futures contract was 95.480, up from 95.460.
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