The dollar is almost US2c lower, hurt by a big pre-dawn rally in the US dollar.
At 5pm AEST, the local unit was trading at $US1.0063, down from $US1.0243 yesterday.
The Australian currency fell to $US1.0047 early today, its lowest level since June 2012.
Early this morning, the US dollar shot to 101.21 Japanese yen, passing the 100 yen mark for the first time in four years.
Forex.com research analyst Chris Tedder said the greenback's surge came after a report showed that US claims for unemployment benefits last week dropped to their lowest level in over five years.
He said this further sign of strong employment growth sparked speculation that the US Federal Reserve may start to scale back its economic stimulus programs that have weighed on the American dollar for the past couple of years.
"A break to parity with the US dollar may elude the Aussie for now, given the strength of support around 100.5 US cents and 100 cents," he said.
"However, we can see further Australian weakness in the long term.
"If the walls around parity fall in the near term, then we may see price action replicate the massive selloff of April and May last year."
The local currency traded in a tight range for the remainder of the day session, showing no reaction to the Reserve Bank of Australia's Statement on Monetary Policy, which reaffirmed economic growth forecasts and cut inflation forecasts.
Markets tonight will be closely watching a speech by US Federal Reserve chairman Ben Bernanke to a conference hosted by the Chicago Federal Reserve.
