The Australian dollar has opened lower as the reduced threat of Hurricane Gustav to US oil supplies boosted the American currency.
At 0700 AEST, the Australian dollar was trading at $US0.8501/08, down from yesterday's close of 0.8537/42.
Overnight, the local currency traded between $US0.8479 and $US0.8579.
Corporate manager with online currency trader OzForex John Corcoran said the fall in oil prices from the lower risk of Hurricane Gustav had lifted the US dollar overnight.
Oil prices fell nearly four per cent as Hurricane Gustav was downgraded to category 2 and lowered the threat to energy plants on the US Gulf coast.
More than a quarter of all US oil production and a third of the nation's refineries are located in the Gulf of Mexico region.
Light sweet crude futures for October delivery fell $USUS4.07 to $111.39 a barrel in electronic trading after dipping to a four month-low of $110.63.
Brent North Sea crude futures for delivery in October dropped $US4.05 to $US110 a barrel.
"There has definitely been some breathing room given to the US economy by the pull back in oil," Mr Corcoran said from Toronto.
"There has been a great deal of concern about Gustav.
"There is no real impact we expect from Gustav from the next couple of days."
The market's gaze would be on the Reserve Bank of Australia's (RBA) board meeting and interest rate decision today, Mr Corcoran said.
All 17 economists surveyed by AAP expect the central bank to start cutting the official cash rate, currently 7.25 per cent, at its monthly meeting today. The decision is scheduled to be announced at 1430 AEST.
"It is a pretty clear indication that it will be a 25 basis point drop," Mr Corcoran said.
"They have indicated that monetary policy is at a short-term peak.
"It would appear that the next few steps for monetary policy would be to drop rates."
Mr Corcoran said the market would be looking beyond the immediate decision with the release of the board's statement.
"They are looking for something a bit firmer from the accompanying statement: which direction they will be taking next," he said.
Other local data today include building approvals for July, due from the Australian Bureau of Statistics at 1130 AEST.
The market's forecast is for approvals to rise 0.3 per cent after a 0.7 per cent fall in June.
Mr Corcoran expected the local currency to find support around $US0.8480 to 0.8500 in the local session.
