The Australian dollar is lower on a fall in the gold price, and fears that US politicians won't resolve the country's fiscal cliff before the year's end.
At 1200 AEDT on Friday, the local currency was trading at 104.61 US cents, down from 104.91 cents on Thursday afternoon.
CMC Markets foreign exchange dealer Tim Waterer said the currency had dropped slightly on news of weakness in the spot price for gold, while the US fiscal cliff remained a significant factor.
"The Australian dollar was under pressure last night, influenced by a fall in the price of gold overnight.
"It's now under $1,650 per ounce, and that put a cap on enthusiasm for the Aussie dollar overnight."
The spot price for gold was $1,648.21 at 1200.
Mr Waterer said there was little scope for the currency to rally in the next few days.
"It's unlikely it will rise above 105 (US cents), just because of uncertainty with the fiscal cliff, and this weaker gold price," he said.
"The Aussie dollar did have a very good run in the first few weeks of December, but I think traders are now sitting tight."
On Friday, the US House of Representatives is due to vote on a `Plan B' for the budget, proposed by Republican speaker John Boehner.
However, it is unlikely that president Barack Obama will support the plan, making a resolution of the fiscal cliff as far away as ever.
The cliff is a series of tax hikes and spending cuts due to begin automatically in January.
Meanwhile, Australian bond futures prices were lower at noon.
At 1200 AEDT on Friday, the March 10-year bond futures contract was at 96.655 (implying a yield of 3.345 per cent), down from 96.660 (3.340 per cent) at Thursday's close.
The March three-year bond futures contract was trading at 97.240 (2.760 per cent), down from 97.250 (2.750 per cent).