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SYDNEY, Dec 3 AAP

December 03 2012, 12:28AM

The Australian dollar has fallen on weak data and expectations of a rate cut from the central bank.

At 1200 AEDT on Monday, the currency was trading at 104.02 US cents, down from 104.33 US cents at Friday's close.

Since 0700 AEDT on Monday, it has traded between 103.93 US cents and 104.41 cents.

National Australia Bank (NAB) co-head of foreign exchange strategy Ray Attrill said the Aussie dollar had fallen notably following the release of weak retail trade and business data.

"I'm surprised that the market has taken it as poorly as it has," he said.

"The reaction seems mainly based on the retail numbers, which have consolidated the assumption that we're going to see a rate cut tomorrow."

Retail spending was flat in October, compared to expectations of a 0.4 per cent rise, while company gross operating profits fell 2.9 per cent, although they were also expected to rise 0.4 per cent.

The local currency fell from 104.26 US cents just before the data was released to 104.06 cents afterwards.

Mr Attrill said the Australian dollar was unlikely to move much more ahead of the Reserve Bank of Australia (RBA)'s rate decision on Tuesday.

The RBA is expected to cut the cash rate by 0.25 of a percentage point, from 3.25 per cent.

Meanwhile, Australian bond futures prices were higher at noon.

At 1200 AEDT on Monday, the December 10-year bond futures contract was at 96.940 (implying a yield of 3.060 per cent), up from 96.915 (3.085 per cent) on Friday afternoon.

The December three-year bond futures contract was trading at 97.420 (2.580 per cent), up from 97.380 (2.620 per cent).