The Australian dollar fell on Thursday noon after disappointing domestic building approvals data gave investors an excuse to sell into some of its recent hefty gains.

At midday AEST, the local currency was buying at 96.85 US cents, down 0.17 US cent from Wednesday finish of 97.02 cents.

At 11.30am, data from the Australian Bureau of Statistics published figures that showed building approvals had fallen 4.7 per cent in August.

The Aussie had traded at $0.9704 before the data was released. The hourly chart showed near-term support was at $0.9649, then $0.9623. Resistance was seen at overnight high of $0.9730, also a two-year peak.

It was looking less likely that the Reserve Bank of Australia would increase the cash rate when it meets on Tuesday, according to ICAP senior economist Adam Carr.

''We've just seen a fall in building approvals for August, we've seen credit growth anaemic and at it's lowest since the 1980s and we learned today that house prices have fallen.''

Sluggish approvals data suggested higher interest rates were hurting demand for new homes and the buoyant construction sector could slow next year.

It may also worry the Reserve Bank of Australia (RBA) which has hinted rates need to go up even more to cope with Australia's trade boom.

Mr Carr said the Aussie may reach parity with the greenback if the US Federal Reserve does decide to engage in quantitative easing in order to pump money into the economy.

He predicts the currency will trade between 96.8 US cents and 97 US cents for the rest of the day.