Australian Dollar Opened Weaker Today as investors continued to sell the local currency to support recent yen purchases: At 7am (AEDT), the local unit was trading at US74.30¢, below Friday's close of US74.60¢. In the weekend's trade, it hit a high of US74.79¢ and a low of US74.20¢.

National Australia Bank currency strategist John Kyriakopoulos said traders were continuing to sell the Australasian currencies as they bought back Japanese yen positions. "The big theme of the week was just long US positions being cut - I think we saw a continuation of that in terms of the further strength we saw in the yen," he said. "If you think about where some of those short yen positions were, they were against the New Zealand and Australian dollars."

He said the local unit had fallen about 1.6 per cent over the last week against the US dollar. "It's just a position squaring move that's at play although I would say that with the gold price coming off pretty sharply, that's probably been another fundamental reason for the Australian dollar to be lower against the US dollar," he said.

"If you look at charts, there seems to have been a pretty strong correlation of late between the gold and the Australian dollar," he said. And despite a healthier-than-expected US current account deficit on Friday, the US currency weakened. The current account was a bit better than expected although it was driven by a one-off loans for insurance payments probably related to the hurricanes," Mr Kyriakopoulos said.

US government data showed the September quarter current account gap narrowed to $US195.8 billion, due partly to big insurance claims and donations from abroad for Hurricane Katrina.