THE dollar closed almost one US cent weaker as the positive reaction to the trillion dollar European bailout package wore off amid concerns the sum isn't enough to rescue heavily indebted euro zone nations. At 17:00 (AEST), the dollar was trading at 89.64 US cents, down from yesterday's close of 90.47 cents. Since 07:00 AEST, the local unit traded between 90.32 US cents and 89.56 US cents. European leaders and central banks worldwide have agreed upon a $US1 trillion ($1.11 trillion) aid package to avert sovereign debt default by weak European nations such as Greece. Commonwealth Bank currency strategist Joseph Capurso said the local currency weakened against the US dollar as investors began to question whether the massive bailout package would end the debt crisis in Europe. "People are having a closer look at what's happening in Europe,'' he said. "They've had more time to look at that assistance package and realise it's not as great as their initial reactions showed yesterday.'' Mr Capurso said investors felt the package would not successfully bail out indebted European nations. "As it stands, it won't cover the needs of the countries who need the help,'' he said. The package brought relief to investors during yesterday's local session, with the domestic share market and currency rallying on the news. At 17:00, the dollar was at 82.82 yen, down from yesterday's close of 84.09 yen, and at 70.60 euro cents, up from 69.76 euro cents. The euro finished at 1.2481 US dollars, down from Monday's close of 1.2491 US dollars, and at 117.35 yen, down from 120.58 yen. The US dollar was at 92.39 Japanese yen, down from its previous close of 92.95. Meanwhile, the Australian bond market closed firmer. At 16:30, the yield on the Commonwealth Government April 2020 bond was 5.479 per cent, down from yesterday's close of 5.573 per cent, while the May 2013 bond was at 5.032 per cent, down from 5.128 per cent. On the Sydney Futures Exchange, the June 10-year bond futures contract was at 94.510, up from yesterday's close of 94.430, while the June three-year bond futures contract was 94.910, up from 94.810 on Monday. The excitement wore off after interest rates surged in the bond market when the EU bailout package was announced. The local dollar headed south yesterday and stock markets sold off and bond yields and futures contract prices rebounded. JP Morgan interest rate strategist Sally Auld said the local bond market firmed early in the trading day, rallying as risk aversion returned to the market following yesterday's sell off. At 16:30, the 90-day bank bill rate was at 4.840 per cent, down from 4.860 yesterday while the 180-day bank bill rate was at 4.940 per cent, down from 4.950, where it closed previously. At 16:00 AEST, the RBA's trade weighted index (TWI) closed at 70.4, down from 70.8 on yesterday.

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