THE dollar was US1c higher at noon, ahead of the release of a raft of Chinese economic data.
At midday (AEDT), the dollar was at US98.55c, up from yesterday's close of US97.45c.
Since 7am today, the local unit has been trading between US98.47c and US98.80c.
China surprised the market on Tuesday night by raising its key interest rates for the first time since the global financial crisis.
The move was intended to control inflation and rapid growth.
The market is now keenly awaiting this afternoon's (AEDT) release of China's GDP, CPI, producer price index, industrial production and retail sales figures.
CMC Markets foreign exchange dealer Tim Waterer said the local currency had been in a fairly tight trading range so far today.
"Equities markets gave up some of its earlier gains, which cause the Aussie to ease just below the 98.50 level," Mr Waterer said.
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"I expect no break out moves ahead of the release of the data later on today.
"If we do see some strong numbers coming out from China this afternoon then that would bode well for a growth currency and a commodity currency and the Aussie ticks both those boxes."
He said in the coming days the market would be looking for further hints on what the US Federal Reserve would do on the issue of quantitative easing.
The Fed is expected to make an announcement in early November on whether it will buy up more US bonds in an effort to increase the supply of money to stimulate the economy.
"Any sort of numbers which can impact their (the Fed's) thinking, I expect the market to react to fairly sharply," Mr Waterer said.
He expects the dollar to trade between US98.40c and US98.90c in the lead up to the release of the Chinese data.
Meanwhile, bonds were lower at noon.
At 12pm today on the Sydney Futures Exchange, the December 10-year bond futures contract was at 94.840 (implying a yield of 5.160 per cent), down from 94.865 (implying a yield of 5.135 per cent).
The December three-year bond futures contract was at 95.060, (4.940 per cent), down from yesterday's close of 95.100, (4.900 per cent).
China currency report delayedDollar lower at noon, below parity
