At 5pm AEDT, the Australian dollar was trading at $US0.6711/16, down from yesterday's close of $US0.6859/64.
During the day, the local currency traded between $US0.6610 and $US0.6760.
Societe Generale chief foreign exchange dealer Paul Milton said today's movements of the dollar were "erratic", particularly after the Bank of Japan cut its key interest rate for the first time in seven years today.
The Bank of Japan (BOJ) cut its key interest rate by 20 basis points to 0.30 per cent today in a bid to stave off a recession in Asia's largest economy.
The BOJ governor Masaaki Shirakawa decided to cut rates after the the bank's board was evenly split, four/four, on whether to lower interest rates.
"With the BOJ now cutting rates, the four-four decision has put a bit of question mark over the decision," Mr Milton said.
"The Aussie (dollar) seems a bit overawed, but it seems to be hanging in there."
Mr Milton said the dollar was pulled lower with weaker commodity markets overnight.
Overnight, commodity prices were weaker with copper down 10 per cent, nickel off 14.2 per cent, lead fell 8.5 per cent and zinc 7.9 per cent lower.
"The Aussie has not been able to get on with it today," he said.
"There is not a lot of liquidity out there for the Aussie.
"It is just flopping about with the rest of the currency base."
Also concerns over a slowing global economy hampered the Australian dollar overnight after US gross domestic product (GDP) contracted 0.3 per cent for the third quarter.
Tonight, markets will take direction from US personal income figures for September and personal consumption and expenditure index for the same month due for release.
Also, US Federal Reserve chairman Ben Bernanke will speak at a function at the University of California at Berkeley.
Mr Milton said the Australian dollar would struggle to break through the $0.6850-6900 area.
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