Dollar falls below parity amid Libya concerns

DOLLAR falls below parity overnight as risk averse markets continued to be concerned over the political unrest in in Libya.

THE dollar fell below parity overnight as risk averse markets continued to be concerned over the political unrest in in Libya.

At 7.00am (AEDT), the local unit was trading at 99.75 US cents, almost half a US cent lower than yesterday's close of 100.27 cents.

Since 5.00pm (AEDT) yesterday, the dollar traded between 99.70 cents and 100.45 cents.

Libyan leader Muammar Gaddafi yesterday ordered his forces to crush an uprising that has rocked his 41-year rule, warning armed protesters they will be executed.

At lunchtime yesterday a 6.3 magnitude earthquake hit the New Zealand city of Christchurch, with at least 65 people confirmed dead.

HiFX senior trader Stuart Ive said the Libyan unrest and the New Zealand earthquake put the dollar under pressure.

"The Aussie is being brought down by events in New Zealand to a lesser degree but more on what is going on in the Arab nations as a whole," Mr Ive said from Auckland.

"The stock markets in Asia got hit fairly bad yesterday from risk aversion concerning the Middle East."

Mr Ive said that political unrest in Arab nation still seemed to be the focus of the northern hemisphere markets at the moment.

Key Australian economic events this week include the release for capital expenditure data for the December quarter tomorrow and a speech by Reserve Bank (RBA) governor Glenn Stevens in Melbourne today.

"I think the Aussie will get some support from the comments from Stevens and from further data out during the week," Mr Ive said.

Mr Ive said he expected the dollar to trade in a range between 99.40 US cents and 100.50 US cents today.