The Australian dollar has fallen one US cent following a US dollar resurgence and attempts by the Reserve Bank to talk the currency down.
At 1200 AEDT on Wednesday, the local currency was trading at 86.85 US cents, down from 87.85 cents on Tuesday.
RBA assistant governor Guy Debelle said in a speech on Tuesday that the Australian dollar remained overvalued.
Those comments, along with remarks that global financial markets could face a "violent" crash, have weighed on the currency, OANDA Asia Pacific senior trader Stephen Innes said.
"The Aussie had a whippy 24 hours testing the upper resistance level of 88 US cents yesterday and it's now back testing the 87 cent resistance level," Mr Innes said.
"The catalyst was the RBA's Guy Debelle. His comments that the market could be in for a crash while jawboning the Australian dollar lower has caused quite a stir."
Meanwhile, Australian bond futures prices were higher.
The December 2014 10-year bond futures contract was trading at 96.705 (implying a yield of 3.295 per cent), up from 96.660 (3.340 per cent) on Tuesday.
The December 2014 three-year bond futures contract was at 97.450 (2.550 per cent), up from 97.430 (2.570 per cent).