Dollar dives as investors flee to greenback

The Australian dollar is trading near Friday's closing price of 61.7 US cents this morning after suffering its biggest sell-off since it was floated in 1983 over the weekend.

On Friday the currency hit a five-year low against the greenback of just over 60.5 US cents.

CommSec analyst Juliana Roadley says the dollar could fall below 60 US cents.

"Well here at CBA we are looking that it might move below 60 but moving into the new year, we feel it will stabilise around these levels at the moment," she said.

"There is a lot more water to go under the bridge before we possibly see stability coming back into the markets."

At around 7:00am AEDT the dollar was buying around 61.9 US cents.

In futures trade, the Share Price Index 200 had fallen by 1 per cent, or 37 points, to 3,840.

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