THE dollar was lower at noon, backing away from its record high on Friday night.
The dollar reached parity with the US dollar late on Friday night for the first time since the currency was floated in December 1983.
The breaking of this barrier came after a speech from US Federal Reserve chairman Ben Bernanke regarding further weakness in the US economy.
In a speech in Boston, Dr Bernanke said the Federal Reserve was ready to increase measures to stimulate the economy.
Dr Bernanke's comments raised already elevated expectations that the Fed is ready to pump billions of dollars into the economy to drag the US out of an economic slump.
At midday (AEDT) today, the dollar was trading at US98.75c, down from Friday's close of US99.28c.
Since 7am, the local unit traded between US98.60c and US99.31c.
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CMC Markets foreign exchange dealer Tim Waterer said the local unit has fallen away from its Friday highs.
"It's almost a case of the Australian dollar suffering some post parity blues this morning, perhaps fuelled by some weakness in equity markets and there was a drop off in the price of gold today," he said.
Mr Waterer was confident the local unit would again reach parity with the US dollar this week.
"There are a few things happening that could spark another run higher," he said.
He said the release tomorrow of the Reserve Bank of Australia's (RBA) minutes of its October 5 monetary policy meeting would be closely watched by traders
"Certainly the rhetoric that is coming out from Bernanke that more QE (quantitative easing) is just around the corner and that's keeping the buying of the US dollar on the sidelines and that's what has allowed the Aussie and the euro put on some fairly considerable gains in the past month," Mr Waterer said.
"So traders are still pricing in more upside to the AUD, perhaps it would be going through parity in the coming months.
"We're still seeing clients generally happy to hold on long positions and we're not seeing any rush to close out or take profit at this stage."
He said the market would be closely watching the US housing data due out tomorrow night (AEDT).
Mr Waterer expects the dollar to trade between US98.50c and US99.20c afternoon trade.
Meanwhile, the bond market was weaker at noon.
At midday on the Sydney Futures Exchange, the December 10-year bond futures contract was at 94.820 (implying a yield of 5.180 per cent), down from 94.905 (5.095 per cent) on Friday.
The December three-year bond futures contract was at 95.050 (4.950 per cent), down from Friday's close of 95.110 (4.890 per cent).
First Horizon turns profit in third quarterDollar a fraction off parity with US dollar
