At 5pm (AEST), the local currency was trading at $US0.8691/95, down from yesterday's close of $US0.8740/42.
During today's domestic session, the unit moved between a low of $US0.8610 and a high of $US0.8711, according to IRESS data.
CMC Markets foreign exchange dealer Jian Wei said the Australian currency was caught in the slipstream of risk appetite that pushed the domestic stock market to close higher.
"We were under pressure this morning," Mr Wei said.
"But there's been a rally on equity markets led by the banks, and the Aussie dollar, of course, solely followed (the) equity markets.
"Investors are looking for high risks, and if they're looking for high returns the Australian dollar will always get support from that."
Currency traders tend to look to share markets as a barometer of risk sentiment, in the absence of decisive economic data. The share market closed moderately higher, driven by gains on financial stocks.
The benchmark S&P/ASX200 index was up 12.1 points, or 0.26 per cent, to 4713.3 points, while the broader All Ordinaries index gained 6.8 points, or 0.14 per cent, to 4714.8 points.
At 4.15pm (AEST), the Sydney Futures Exchange, the December share price index contract was one point higher at 4728 points on a volume of 30,034 contracts.
But the positive lead wasn't enough to help recover all the dollar's lost ground from yesterday's offshore trade.
The unit opened the trading day at $US0.8646/51 after the US National Association of Realtors said existing home sales fell 2.7 per cent in August to 5.1 million, which was below market expectations of 5.4 million.
Mr Wei said the dollar losses could be reversed by favourable US durable goods data for August, which is due at 10.30pm (AEST) during today's offshore trade.
The median market forecast is a 2.2 per cent rise in August.
Mr Wei said a positive result for the series could see the local unit "sit comfortably" above $US0.8700 until Monday.
At 4pm (AEST), the Reserve Bank of Australia's (RBA) trade weighted index (TWI) was at 67.5, down from yesterday's close of 67.7.
Stocks tumble amid investors’ worriesBanks, miners push market lower
