The Australian dollar has dropped below 87 US cents as global economic growth concerns weigh on risk appetite.

At 0700 AEDT on Monday, the local currency was trading at 86.96 US cents, down from 87.79 cents on Friday.

The Australian dollar started on a downward spiral last week after economic growth forecasts for Germany, Europe’s largest economy, were lowered.

That sparked a tone of risk aversion, with global share markets tumbling on Friday.

“Sentiment rather than new news drove the moves,” National Australia Bank global co-head of FX strategy, Ray Attrill, said.

Attrill said the US dollar rose against all currencies but the Australian dollar was the “biggest loser” of the G10 currencies.

“In currencies, the US dollar rose against everything bar the Japanese yen, the latter still proving its mettle as the pre-eminent safe-haven currency,” he said.

Monday is set to be a quiet day, with little economic data due to be released.

AAP