At 12.00pm AEDT, the dollar was trading at $US0.6913/19, down from yesterday's close of $US0.7039/45.
During the morning, the local unit moved between $US0.6764 and $US0.6946.
The dollar started the local session at its morning high of $US0.6946, before falling as a weaker Wall Street dragged the currency lower.
The Dow Jones Industrial Average ended 2.49 per cent lower, while the tech-rich Nasdaq fell 1.71 per cent.
The Australian bourse followed suit, with the All Ordinaries index down 0.86 per cent at 12.00pm AEDT.
ABN Amro currency strategist Greg Gibbs said the dollar was under pressure from weak sharemarkets and falling commodities prices.
The price of oil price fell to its lowest point for more than 4 years, under $US38 per barrel, on talk that OPEC would not fully enforce a record cut in oil production.
"It has had a sharp dive, following the falls late in the US session, before having a partial recovery,'' he said.
"It has fallen off the highs on the back of weak equities and weak commodities.
"Base metals were off and oil was falling sharply.''
Mr Gibbs said the rest of the local session would be fairly subdued, with the dollar trading within a range of $US0.6800 and $US0.7000.
The latest monetary policy announcement by the Bank of Japan later on Friday would be the most important event for the Asian session, he said.
Copper futures on the London Metals Exchange closed 5.7 per cent lower overnight.
The price of gold in Sydney was $US845.85 per fine ounce, down $US20.15, or 2.33 per cent on Thursday's close of $US865.00.
Forecast hammers Genesco shares
Dollar General sales are up 12.4%
Dollar higher as shares rise
