The dollar opened weaker today as a resurgent US unit continued to punish the carry traders.
At 7am AEST, the domestic unit was trading at $US0.8188/93, down from yesterday's close of $US0.8225/27. It traded between a low of $US0.8187 and a high of $US0.8228 overnight.
OzForex corporate dealer Alex Nicholas said the high interest rate Australian and New Zealand currencies took a battering overnight as the US dollar regained strength despite the absence of economic data.
"The Aussie and the Kiwi have taken some of the biggest falls.
"It's the risky currencies where people borrowed the yen and invested in the Aussie and the Kiwi entirely on a speculative basis."
Carry traders borrow the low interest rate Japanese yen to buy high interest rate money like the dollar.
In recent months, the Aussie has surged past and stayed well above the $US0.8000 mark as the US dollar has weakened based on negative sentiment about the world's biggest economy.
"A lot of the data was not that negative but the talk was," Mr Nicholas said. "The fundamentals remain fairly solid and we don't see too many reports showing seriously negative US data."
Stronger consumer sentiment and housing starts numbers in the US last week are now feeding the view the US Federal Reserve is unlikely to cut interest rates this year.
"The general consensus is ... the US economy might be better off than people had been talking about," Mr Nicholas said.
So while the euro and the British pound have weakened against the greenback, the dollar has lost even more value.
Mr Nicholas said the local currency would take even more of a hit on Thursday night if US data on durable goods and new home sales, both for April, were positive.