THE dollar was flat at noon as the currency traded in a narrow range as investors re-position their books for end-of-month trading.
At midday (AEST) today the dollar was trading at $US0.8991/93, where the currency ended yesterday's local session.
Since 7am, the dollar traded between $US0.8978 and $US0.9021.
RBC Capital Markets senior currency strategist Sue Trinh said the dollar was on the back foot for most of the morning session as equity markets in Asia continued the weak lead from Wall Street.
The Dow Jones industrial average index finished down 0.29 per cent.
Australia's benchmark S&P/ASX200 index had fallen 0.5 per cent by noon, while Japan's Nikkei-225 index was 1.47 per cent lower.
"It is coming off as risk appetite appears to be peeling off in line with the sell-off in equity futures," Ms Trinh said Hong Kong.
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"It appears to be a bit of follow through the weaker close on the US stock markets."
Ms Trinh said the dollar had been weaker as investors rebalance their holdings of currencies at month-end.
Investors re-weight their portfolios at the end of the month, quarter and half-year periods for larger-than-expected movements in asset classes.
Foreign exchange hedges are used by investors as insurance to minimise the exposure of currency volatility.
"The market is probably caught a little bit long on Aussie and trying to preposition for the US dollar selling that is anticipated for month-end," she said.
Foreign exchange hedges are used as insurance to minimise the exposure of currency volatility.
For the rest of Asian trade today, Ms Trinh forecast the dollar to move between $US0.8900 and $US0.9020.
Meanwhile, the debt market was firmer at noon.
At midday, the yield on the Commonwealth Government April 2020 bond was 5.199 per cent, down from yesterday's close of 5.234 per cent, while the May 2013 bond was at 4.587 per cent, down from 4.649 per cent.
On the Sydney Futures Exchange, the September 10-year bond futures contract was at 94.790, up from yesterday's close of 94.755, while the September three-year bond futures contract was 95.330, up from 95.270.
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