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$A lower despite housing data

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AAP

2012-11-12

The Australian dollar has shrugged off better housing data to finish the day marginally lower.

At 1700 AEDT on Monday, the currency was trading at 104.17 US cents, down from down from 104.25 cents on Friday.

It lost ground over the weekend amid concerns about the so-called US fiscal cliff - a series of tax rises and spending cuts due in 2013.

If President Barack Obama cannot reach an agreement with the Republicans, which control the US House of Representatives, to avert some of the measures, economists fear the country will fall back into recession.

Commonwealth Bank currency strategist Joseph Capurso said the Australian dollar had benefited from weakness in its US counterpart.

The currency traded as low as 103.86 US cents on Monday but lifted throughout the local session.

"The Australian dollar has been rising mostly because the US dollar has been weakening all day against most currencies," he said.

"That's really been the driver, it has been a quiet day overall."

He said the release of relatively strong domestic housing data had little effect on the local currency.

Housing finance data from the Australian Bureau of Statistics on Monday showed the number of home loans approved in September rose 0.9 per cent, while the value of all home loans - including owner-occupied and investment properties - rose by 3.8 per cent.

Mr Capurso said he did not expect a meeting of eurozone finance ministers to have a major effect on the Australian dollar overnight.

At 1700 AEDT, the Australian dollar was at 82.79 Japanese yen, down from 82.91 yen, and at 81.83 euro cents, up from 81.60 euro cents.

Meanwhile, CMC Markets chief market strategist Michael McCarthy said Australian bond futures prices remained higher on Monday, following a rally in safe haven assets on Friday night.

"On the face of it, there doesn't seem to be a good reason for bonds to rally on local data," he said.

"So the rally we have seen is in line with what we have seen across the markets on Friday night and across Asia today."

At 1630 AEDT on Monday, the December 10-year bond futures contract was trading at 97.005 (implying a yield of 2.995 per cent), up from 96.975 (3.025 per cent) on Friday.

The December three-year bond futures contract was at 97.460 (2.540 per cent), up from 97.430 (2.570 per cent).