The dollar has sunk to a three-month low as investors reacted to disappointing growth figures and expectations increased of a cut soon to the US Federal Reserve's stimulus program.
The dollar fell briefly to US89.99¢ on Thursday morning. It recovered slightly but slipped again after official figures showed that Australia's trade deficit almost doubled in October. It bounced back slightly and was buying US90.44¢ in late trade.
"The hate-fest continues for the [dollar]," said Westpac senior currency strategist Sean Callow.
"And that's despite commodity prices. Iron ore's up 1.1 per cent to its highest since 15 August. Gold rose and copper's up 2.6 per cent. There are reasons to be optimistic about the Aussie, but it's yet to show through in price action at all."
The dollar has been the weakest-performing currency against the US dollar over the past month, declining 5 per cent. It has fallen for six weeks and looks set to extend its falls into a seventh week. It lost 3.68 per cent of its value in November, its biggest monthly decline since June.
At the same time, a rise in US bond yields reflected greater optimism about the American economy, with investors starting to price in the risk of a near-term taper of the US Fed's asset-purchasing scheme.
Yields on 10-year US government bonds rose to 2.84 per cent during the day, their highest levels since mid-September. Yields on 10-year Australian government bonds rose to November 2011 levels and were at 4.41 per cent late on Thursday.
Traders were encouraged by the ADP jobs report released on Thursday ahead of official figures on Friday. The report said US companies had added 215,000 jobs in November, far more than the market had expected. October's figures were revised upwards to 184,000.
In Australia, the trade deficit widened to a seasonally adjusted $529 million for October, after reaching $271 million the month before, Bureau of Statistics data showed. Economists had expected a deficit of $350 million. Exports remained flat at $27.27 billion, while imports rose by 1 per cent to $27.80 billion.
Exports to China continued to rise to new highs, growing 7 per cent for the month to $9.1 billion. But they were offset by falls in exports to other countries, such as Japan, India and South Korea.