The Australian dollar opened weaker early today as shareholders wait for the interest rate decision of the Reserve Bank of Australia during the domestic session.

With Wall Street still closed for the July 4 Independence Day public holiday, there was a thin trading volume during the offshore session.

At 7am AEST, the Australian dollar was exchanging at 83.98 US cents, down from yesterday's closing rate of 84.56 US cents.

From 5pm AEST on Monday, the local currency ranged between 84.67 and 83.71 US cents.

According to Bank of New Zealand head of foreign exchange Mike Symonds, the Australian dollar was locked into a muted trading range ahead of the RBA's interest rate decision at 2.30pm AEST.

"It's not unexpected with markets delayed by the US holiday," said Mr Symonds.

"We're just marking time for the RBA interest rate decision."

The RBA board is scheduled to declare whether it will increase, reduce or keep the cash rate steady from the current 4.5 per cent.

All 16 economists surveyed by AAP late last week predicted the RBA will maintain the present cash rate.

Mr Symonds said the Australian dollar was depressed also by market anxiety over the European financial crisis and its potential impact for global growth.
According to him, traders and investors would seek the RBA statement on Tuesday afternoon to see how concerned the central bank is about the European scenario.

The past few months saw market sentiment waver over fears that the economies of Greece, Spain, Ireland, Iceland or Portugal might collapse under debt.