The Australian dollar opened half a cent lower as risk averse investors took profits following stronger support for the US dollar.
At 0700 AEDT, the Australian dollar was trading at $US0.9146/55, down from Friday's close of $US0.9196/98.
During the offshore session, the local unit traded in a broad range between $US0.9060 and $US0.9215.
Commonwealth Bank Vice President of Institutional Banking and Markets Tim Kelleher said the local currency had finished weaker after sharp movements in the US dollar during the offshore session.
"The overriding thing is probably a risk factor again but we did see some strange goings on with the US dollar on Friday night as well," Kelleher said from Auckland.
"There's talk of Ukraine sovereign default going around the markets, which put the Euro under pressure.
"It appears the market is taking profit on some of the long positions and obviously the Australian dollar has been a particularly strong performer over the past three or four months."
Kelleher said the domestic currency had suffered as a result.
Key US housing sector data may provide direction for Wall Street in the coming week as the market looks for confirmation of economic recovery.
Investors are expected to monitor data on sales of new and existing homes for evidence that a recovery is on track in the sector at the epicentre of the financial crisis.
New York's main indices closed out a mixed week ahead of a new week marked by the Thanksgiving Day holiday on Thursday.
The Dow Jones Industrial Average edged up 0.46 per cent on the week to 10,318.16, a third straight week of gains for blue chips.
Negative US treasury yields and a "common call" that the Australian dollar would reach parity with the US dollar had been another factor for the weaker Australian currency, Kelleher said.
"It does seem to be suffering from everyone having the same position, being long," Kelleher said
The stronger US dollar led the local unit to continue to weaken since the middle of last week.
Kelleher said the Australian dollar would strengthen on local markets, with no significant local data due to be released on Monday.
"Most of the data will be US data for the rest of the week," he said.
©2009AAP