Dollar opens lower on offshore stock drops

Dollar opens lower on offshore stock drops : The Australian dollar opened lower this morning after it was unable to claw back weekend losses following weakness in US equities on Friday. At 7am eastern daylight time, the Australian dollar was trading at 96.89 US cents, down from Friday's close of 97.18 US cents. It was also buying 81.2 yen, 72.74 euro cents and 62.05 pence.

US stocks markets fell on Friday, with a holiday-thinned rank of traders taking their cue from European bourses.Advertisement: Story continues below, Since 5pm Friday, the local unit traded in a range between 96.13 US cents and 97.22 US cents.

Commonwealth Bank vice-president of institutional banking and markets, Tim Kelleher, said the local unit lost ground over the weekend due to US equities losses and continuing tensions in North Korea. But the local currency rebounded, he said, after details of a bail out deal for Ireland were released.

EU governments on Sunday approved an 85 billion ($115.59 billion) bailout for Ireland to help it withstand the weight of its banking crisis.

According to a statement released by the Irish government, the country will take 10 billion euros ($13.6 billion) immediately to boost the capital reserves of its banks. Another 25 billion euros ($34 billion) earmarked for the banks will remain in reserve.

"The overriding thing is the Aussie is getting a relief bounce in the euro which has dragged the Aussie up," Mr Kelleher said from Auckland.

"We can still expect the markets to be a bit concerned. It was a bit extended up around that parity area."

Investors would sell into rallies during domestic trade, he predicted. "We'll probably see some profit taking on it.

"I think there will be a few exporters buying and a bit of bargain hunting."

Traders were preparing for a "full week of data" ahead and questions would remain around Europe and stability on the Korean peninsula. "There's talk of Belgium being in trouble as well," Mr Kelleher said.

Australian third quarter company profits and inventories are due to be released on Monday as part of the Australian Bureau of Statistics issue of business indicators from the September quarter. RBA governor Glenn Stevens will speak at the annual CEDA dinner in Melbourne on Monday night.