The Australian dollar opened three quarters of a US cent weaker on Friday as a drop in commodity prices pulled the local unit lower. At 7am (AEDT), the local unit was trading at US74.73¢, below Thursday's close of US75.48¢. Overnight, it hit a high of US75.40¢ and a low of US74.60¢.

OzForex manager of corporate business Jim Vrondas said slipping commodity prices were weighing on the local currency. "The US dollar has been stronger over the last week or so but the strength in the US dollar has not really hampered the Aussie because of the strength in the commodities," he said. "Now we are seeing some profit taking and commodities coming back a bit, in particular gold, which is having an impact on the Aussie."

US gold futures slipped but held above a two-week low of $US500 an ounce after after two days of investor selling, dealers said. But this is well off Monday's near 25-year peak of $US544.50 per ounce.

Mr Vrondas said the local currency is expected to continue to slide into the end of 2005. "The market was quite bearish Aussie dollars earlier in the year and I am expecting it to head a lot lower heading into Christmas," he said.

ANZ Investment Bank senior currency strategist Craig Ferguson said both the Australian and New Zealand dollars have been stubborn in their resistance to US dollar weakness. "The NZ dollar in particular is struggling to stay above $US.7100. A bout of US dollar strength into the weekend driven possibly by further strong US data tonight, could easily see Aussie and (Kiwi dollar) back on their downward path," he said.

On Friday night (AEDT), the US awaits the release of the September quarter current account deficit which is expected to hold just under $US200 billion. On Friday on the local data front, the Australian Bureau of Statistics releases dwelling unit commencements for the September quarter.