The Australian dollar has opened at its lowest level in 11 months as the central bank's interest rate cut and falling prices of commodities hurt the currency.
At 0700 AEST, the Australian dollar was trading at $US0.8378/81, down from yesterday's close of 0.8398/02.
Overnight, the local currency traded between a high of $US0.8425 and 0.8270, its lowest level since September 7 last year.
It was the local dollar's lowest opening level since September 18 last year, when it started the local session at 0.8334/40.
Commonwealth Bank vice-president of institutional banking and markets, Tim Kelleher, said the cut to interest rates by the Reserve Bank of Australia (RBA) yesterday had hampered the local unit.
The central bank cut the official cash rate by 25 basis points to seven per cent, its first cut in rates since December 2001, to boost the slowing Australian economy.
"The major reason is the Reserve Bank cutting rates, as expected," Mr Kelleher said from Auckland.
"Early London (trading) just came in and sold the Australian dollar."
Commodities were quite weak across the board which added to the pressure on the Australian dollar, Mr Kelleher said.
The Commodity Research Bureau (CRB) index fell 3.4 per cent overnight, with oil leading the decline.
Crude oil futures for October delivery fell $US5.75 to settle at $US109.71 a barrel on the New York Mercantile Exchange, after earlier dropping as low as $US105.46.
It was the lowest trading level for oil since April 4.
Oil fell as Hurricane Gustav's impact on US energy facilities in the Gulf of Mexico regioin emerged as minimal.
The price of oil has dropped more than 25 per cent since hitting its record high of $US147.27 a barrel in mid-July.
A lower oil price also lifts the US dollar, as it boosts the American economy by giving consumers more money to spend.
"It was commodities in general," Mr Kelleher said.
"Obviously, the Aussie dollar is treated as a commodity currency. That adds pressure to it."
Since hitting a 25-year high of $US0.9849 on July 16, the Australian dollar has dropped more than 15 per cent.
Today, the Australian Bureau of Statistics releases national accounts data, including on gross domestic product (GDP), at 1130 AEST.
GDP is forecast to increase by 0.4 per cent in the June quarter for an annual pace of 2.9 per cent, according to the median of ten economist forecasts gathered by AAP.
Mr Kelleher expected the local currency to move between $US0.8340 to 0.8420, depending on the GDP print today.
