The Australian dollar is higher after good trade figures were overshadowed by other events affecting currency markets.
At 1200 AEST on Tuesday, the local unit was trading at 93.21 US cents, up from 93.15 cents on Monday.
On Tuesday morning official data showed that Australia’s trade deficit fell to $1.68 billion in June, from a deficit of $2.04 billion in May, the Australian Bureau of Statistics said.
Easy Forex currency dealer Ricky Liu said the Australian dollar failed to gain much ground after the better than expected trade figures.
“To me it’s looking very bearish (for the Australian dollar),” he said.
“Due to US dollar strength and everybody waiting for the local employment data to be released on Thursday the Aussie dollar is just bouncing up and down.”
Mr Liu said the Australian dollar lost a bit of ground just before midday because weak HSBC purchasing managers’ index for July showed that activity in the Chinese services sector was rising at a slower rate.
“That was the worse result for the index for many months,” he said.
During the afternoon the Reserve Bank of Australia will makes its interest rate announcement after its monthly board meeting.
The cash rate is widely expected to stay unchanged at least for the next few months but the focus will be on the RBA’s short statement for a hint on when the next move will be.
Meanwhile, the Australian bond market was firmer.
At 1200 AEST on Tuesday, the September 2014 10-year bond futures contract was trading at 96.545 (implying a yield of 3.455 per cent), up from 96.510 (3.490 per cent) on Monday.
The September 2014 three-year bond futures contract was at 97.310 (2.690 per cent), up from 97.280 (2.720 per cent).