The Australian currency had slumped by noon as weak local economic data urged traders to take profits.

At midday east-coast time, the local unit was trading at 91.32 US cents, lower than yesterday's finish of 91.82 US cents. It was buying 78.33 yen, 69.21 euro cents and 57.62 pence. Since 7am, the Aussie ranged from 91.27 to 91.64 US cents.

The US Federal Reserve, due to meet Tuesday night Australian time, is predicted to leave interest rates at virtually 0 per cent and expected to directly pump money into the economy again.

While the market was cautious, the Australian currency had had a good run recently giving an opportunity for traders to take some profit, according to HiFX senior consultant Derek Mumford.

''Even if they (the Fed) come up with some proposals ... this quantitative easing is just a short term fix,'' he said.

The latest local economic data also contributed to the drop in the domestic dollar.

''We've just heard some NAB business confidence numbers, which were pretty weak, and that's also helped the Aussie selling,'' Mr Mumford said.

Australian Bureau of Statistics data released yesterday showed Australian housing finance commitments for owner-occupied housing plunged 3.9 per cent in June. The market forecast had been for a fall of 2 per cent.

Business confidence has continued declining, while trading conditions also deteriorated in July, according to National Australia Bank's (ASX: NAB) monthly business survey released today. The result was the index's lowest level in 14 months.

''Certainly, it's showing it's very much a two speed economy, which the RBA highlighted last week, and that's a problem,'' Mr Mumford said.