The Australian dollar opened lower, after the US Federal Reserve confirmed fears that the US economy has weakened.

At 7am AEST today, the local unit was exchanging at $US0.8781/83, edging down from Wednesday's close of $US0.8828/31.
Since 5pm AEST yesterday, the Aussie traded from $US0.8860 to $US0.8765.

According to Latitude FX executive sales manager Steve Jardine, investor appetite for risk declined after US Fed chairman Ben Bernanke warned the US economic outlook remained "uncertain".

He also said the central bank could intervene to prop recovery.

"It was more or less the speech by Mr Bernanke before the close," Mr Jardine said, remarking to the Australian dollar's fall slump from its offshore high.

"Bernanke sort of indicated that, supposedly, the Fed isn't out of bullets."

Mr Bernanke forewarned the economy would have only "moderate growth, a gradual decline in the unemployment rate, and subdued inflation over the next several years".

His remarks started two days of hearings in Congress, which is divided over how to cope with high unemployment and a faltering recovery.

US stocks plunged on the news, further discouraging risk appetite.

The Dow Jones Industrial Average fell 1.07 per cent to 10,120.30 points, while the broader S&P 500 index shed 1.28 per cent to settle at 1,069.59.

With no major domestic report due today, Mr Jardine said he predicts the Australian dollar to have a subdued trading day.
He said increases would be limited to $US0.8820 and declines at $US0.8740.