The Australian dollar has fallen to its lowest level for almost two years, dipping below 93 US cents this morning after the US Federal Reserve said it could begin scaling back stimulus measures.

The dive came as investors flocked to the US dollar as the Federal Reserve chairman Ben Bernanke indicated that the central bank may soon slow the rate of money printing in response to an improving economy.

Those comments in a press conference at the end of the Fed's two-day meeting were pretty explicit and investors saw it as confirming that the central bank's money printing - through purchases of about $US85 billion in bonds every month - is likely to be stopped, first in stages within the next six months and then, perhaps, for good.

However, there are a few qualifications - the big one being the US jobless rate which Dr Bernanke predicts should fall from the current 7.6 per cent to 6.5 per cent by next year.

"If the incoming data are broadly consistent with this forecast, the committee currently anticipates that it would be appropriate to moderate the monthly pace of purchases later this year, and if the subsequent data remained broadly aligned with our current expectations for the economy, we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year," Dr Bernanke said.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 2 minutes 35 seconds 2 m 35 s Bernanke confirms end to money printing in sight ( Peter Ryan ) Download 1.2 MB

The Fed chairman tried to reassure investors that a wind down in the bank's money printing program would not translate straight to a rise in interest rates or sudden removal of stimulus.

"If the incoming data supports the view that the economy is able to stay in a reasonable cruising speed, we will ease the pressure on the accelerator by gradually reducing the pace of purchases," Dr Bernanke explained.

"However, any need to consider applying the breaks by raising short-term rates is still far in the future."

Rather than celebrating the improvement in the US economy that has the Fed considering an end to money printing stimulus, US share traders worried about the flow of cheap money that has been available over recent years drying up.

The Dow Jones Industrial Average lost 206 points, or 1.4 per cent, to 15,112.

Dollar dive

The Australian dollar also took a big hit following Dr Bernanke's comments.

It was worth more than 95.5 US cents overnight ahead of the Fed's press conference, but had dropped to 92.9 US cents by 9:54am (AEST) after Ben Bernanke made his remarks about reducing the bank's stimulus program.

The chief economist at Bank of America Merrill Lynch Australia, Saul Eslake, says he expects a further depreciation in the Australian dollar as the US economy improves.

"There's probably going to be more of that to come in coming weeks," he warned.

Mr Eslake says the fall against the greenback has not all been about a strengthening US dollar either.

"There may be independent downside in the Aussie as well, depending on how market opinion shifts about the short-to-medium prospects for the Australian economy too," he added.

Investors are also cautious ahead of the release of HSBC's China flash manufacturing PMI for June, due at 11:45am.

The index of manufacturing activity should give a signal on momentum in Australia's largest export market after its factory activity shrank for the first time in seven months in May as new orders fell.