THE dollar opened weaker today, after risk appetite waned in offshore trade as US stocks slid following muted earnings reports and weak economic data.
At 7am (AEST), the dollar was trading at $US0.8664/67, down from Friday's close of $US0.8764/66.
Since5pm on Friday, the domestic dollar traded between $US0.8808 and $US0.8659.
HiFX trading director Mike Hollows described the offshore session as turbulent, saying the unit was under sustained pressure as US stocks slid on Friday night (AEST).
"We spent the latter part of last week around the $US0.8850 mark," Mr Hollows said.
"On Friday night we saw a very sharp fall in equities ... so there was quite a negative response from a risk perspective."
Weak economic data and poorer-than-expected profit results from companies pushed US stocks lower on Friday night (AEST).
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The Dow Jones Industrial Average fell 2.52 per cent to finish at 10,097.90 points.
All 30 of the Dow's blue-chip shares closed in the red.
Meanwhile, the broad-market S&P 500 index shed 2.88 per cent to 1064.88 points.
Shareswere under selling pressure from the opening bell as investors weighed a conflicting batch of financial results from major companies including Google, Bank of America, Citigroup and General Electric.
Investors also had to contend with the University of Michigan's consumer sentiment index, which dropped by a steeper than forecast 9.5 points in July to 66.5 points, its lowest reading since August 2009.
Also over the weekend, Prime Minister Julia Gillard called a federal election for August 21 in a move that was widely expected.
Mr Hollows said he did not expect the decision to affect the local unit.
"It's not going to have a major part to play," he said.
Investors would turn their attention to Tuesday's expected release of the minutes of the Reserve Bank of Australia's (RBA) July board meeting.
The central bank left the cash rate steady at 4.5 per cent on July 6, but Governor Glenn Stevens's accompanying statement was seen at the time as hinting at an August rate rise.
Mr Hollows said that expectation has died down since.
"I think the RBA is on hold for the forseeable (future)," he said.
"We're going to be driven by the US corporate reporting season."
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