The prevailing controversy over U.S. investment banking giant Goldman Sachs dragged the Australian on a low start when the markets opened Monday as demand for growth assets fell.

At 0700 AEST, the Australian dollar was trading at $US0.9232/37, down 0.89 percent from Friday's close of $US0.9316/19.

Mike Jones, currency strategist at the Bank of New Zealand said the reports that the Federal government is mulling criminal charges against Goldman Sachs affected the Australian dollar and posted a low turnout in last Friday's offshore session.

However, Jones said the Australian dollar still performed above par compared with other commodities-linked currencies.

Speaking in Wellington, Jones news of new criminal charges against the American investment bank sent investor confidence sagging while stocks reported a sharp turnaround on Friday.

In the U.S. shares closed down 1.5 to 2 percent last Friday. But he said that Australian dollar faired pretty well.

Goldman Sachs is being linked by the U.S. Securities and Exchange Commission to securities fraud for its involvement in a synthetic collateralized debt obligations (CDOs) deal that went sour and for allegedly failing to inform its investors that one of its products, Abacus, was designed by hedge fund Paulson & Co. that bet it would collapse.

On Monday's early morning trade, the strict reserve requirements for Chinese banks weighted on the Australian dollar.

The Chinese monetary authority on Sunday required all banks to increase the funds they hold in reserve in an effort to stave off fears the local economy may overheat and the property sector might 'burst.'