BS: Australian dollar slightly lower on Europe data
AAP
The Australian dollar is slightly lower ahead of what is expected to be the release of weak euro zone gross domestic product figures and German economic sentiment data.
At 1700 AEST on Tuesday, the local unit was trading at 105.22 US cents, down from 105.53 cents on Monday.
Since 0700 AEST on Tuesday, the Australian dollar traded between 105.03 US cents and 105.34 cents.
Euro zone June quarter gross domestic product (GDP), to be released later on Tuesday night is expected to show a 0.2 per cent contraction in the euro area economy in the quarter.
Ahead of that, the French and German GDP figures have already been released, that showed zero growth and 0.3 per cent growth respectively for the June quarter.
CMC foreign exchange dealer Tim Waterer said caution is creeping into currency markets ahead of more data.
"Undoubtedly the risk is to the downside heading into the offshore session and that's what's keeping a lid on some of the high yielding currencies like the Australian dollar," he said.
"That's what led to the cautious nature of today's trade."
Mr Waterer said the German economic sentiment data for August will also be released on Tuesday night.
"That could conceivably lead to some weakness in the euro and the Australian dollar would likely follow suit."
At 1700 AEST, the Australian dollar was at ¥82.63, a touch up from Monday's close of ¥82.62, and at €85.14 cents, down from €85.90 cents.
Meanwhile, the Australian bond market was weaker.
The National Australia Bank (NAB) survey, found that business confidence rose in July, helped by comments from European policy makers during the month, which suggested that economic stimulus could be on its way.
Westpac senior market strategist Damien McColough said the NAB survey didn't give safe haven investments, such as Australian bonds any reason to rally.
"That took a little bit of the edge off the (bond) market but we were already coming off anyway coming into the morning session," he said.
"There hasn't been a lot on today, it's been really quiet, volumes are quite low."
At 1630 AEST on Tuesday, the September 10-year bond futures contract was trading at 96.780 (implying a yield of 3.220 per cent), down from 96.820 (3.180 per cent) on Monday.
The September three-year bond futures contract was at 97.270 (2.730 per cent), down from 97.310 (2.690 per cent).
