The Australian currency started weaker, sliding below 90 US cents overnight as traders continue to avoid risk assets due to bad global economic data.

At 0700 AEST Thursday, the local unit was trading at $US0.8968/74, falling from the previous day's finish of $US0.9044/46.

Since 1700 AEST Wednesday, the Aussie ranged from $US0.8969 to $US0.9053.

Reports published yesterday revealed a marked decline in the Chinese economy. The Bank of England, meanwhile, downgraded its economic growth forecast for UK.

On Tuesday night, the US Federal Reserve announced it would start buying government bonds to stimulate the American economy.

The Dow Jones industrial average overnight saw its biggest drop in six weeks with all major indices more than 2 per cent lower.

The poor economic news steered risk aversion, according to Westpac New Zealand senior market strategist Imre Speizer.

"On their own, they're not fresh news or not big enough to warrant big a fall in risk, but add them all together (and) there's a negative influence there for sure."

He said the domestic currency slumped with the decline in global risk appetite.

"It was nothing to do with Australia uniquely. It was a global phenomenon.

"Most markets, whether they're currencies, equities or commodities, things that were considered risky were shunned last night, so people moved into risk averse mode and they sought safe havens.

"I think the trend over the next week or so is going to be for a weaker Aussie."

Mr Speizer said the Aussie could bounce briefly above 90 US cents in the local session, expecting it to trade between US$0.8900 and US$0.9053 this morning.