The Australian dollar continues to fall as the greenback rallies on the back of a strengthening US economy.

At 1200 AEST on Monday, the local unit was trading at 87.24 US cents, down from 87.66 cents on Friday.

During the morning, it dropped as low as 87.15 US cent – its weakest level since late January.

So far in September the currency has dropped 6.8 per cent, which if sustained will be the largest monthly fall since May last year.

FXCM market analyst David de Ferranti expects the Australian dollar to weaken further against a rallying greenback as an interest rate hike by the US Federal Reserve gets closer.

“Traders have their sights set on the 2014 lows for the Australian dollar near 86.60 US cent,” he said.

“While the magnitude of recent declines may open the door to some profit-taking, this may slow its descent rather than prompt a reversal.”

On Wednesday the Australian Bureau of Statistics will release August retail trade data, and international trade and building approvals figures are due out on Thursday.

However, Mr de Ferranti said not even strong local economic data will stop the Australian dollar’s fall because Reserve Bank of Australian is unlikely to change its policy to keep the cash rate unchanged for a considerable period.

Meanwhile, the Australian bond market was weaker.

At 1200 AEST on Monday, the December 2014 10-year bond futures contract was trading at 96.465 (implying a yield of 3.535 per cent), down from 96.480 (3.520 per cent) on Friday.

The December 2014 three-year bond futures contract was at 97.220 (2.780 per cent), level with it local close on Friday.