$A treading water after overnight falls
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The Australian dollar is trading in a tight range after falling overnight after the country's central bank signalled it was prepared to cut the cash rate further if necessary.
At 1200 AEDT on Wednesday, the Australian dollar was trading at 103.84 US cents, down from 104.14 US cents on Tuesday afternoon.
The currency fell overnight as traders in north America and Europe reacted to the release of minutes from the Reserve Bank of Australia' November board meeting, which showed the central bank believed further rate cuts may be necessary.
The RBA cut the cash rate to 3.25 per cent in October but kept it on hold in November.
ANZ foreign exchange strategist Andrew Salter said the currency traded in a tight range on Wednesday morning.
"It's very stable, its trading in a very narrow range," he said.
He said markets were waiting for international developments including a meeting of euro zone finance ministers in Brussels to discuss Greece's debt.
Other factors included the conflict between Israel and Hamas and ongoing talks between US Republicans and Democrats seeking agreement on a long-term debt reduction plan that would avoid the `fiscal' cliff of budget cuts and tax hikes due to automatically start in early 2013. If allowed to take effect the tax increases and spending cuts are expected to push the US into recession.
"The Australian dollar is still captive to international factors," Mr Salter said.
"We're waiting for the resolution of some international events."
At 1200 AEDT on Tuesday, the December 10-year bond futures contract was at 96.860 (implying a yield of 3.140 per cent), down from 96.920 (3.080 per cent) on Tuesday.
The December three-year bond futures contract was trading at 97.360 (2.640 per cent), down from 97.400 (2.600 per cent).