The dollar has shed almost one US cent amid a stronger US dollar and growing expectations of a rate cut when the Reserve Bank meets next week.

At 0700 AEDT on Tuesday, the local currency was trading at 76.41 US cents, down from 77.23 cents on Monday.

The dollar fell as low as 76.34 US cents overnight, as the US dollar regains strength after the shock of the US Federal Reserve statement earlier this month.

Growing expectations of an RBA rate cut next week had put further pressure on the local currency, as iron ore prices continue to fall, National Australia Bank, senior economist, David de Garis said.

He said iron ore prices had fallen further to $52.69 per tonne.

“The Australian dollar has traded down to around 76.40 US cents by late in the US session amid an increased chance of an April RBA rate cut, now priced as a 66 per cent chance, up from around 60 per cent late last week,” de Garis said.

AAP