The Australian dollar sank to a four-year trough against its US counterpart on Tuesday after the Reserve Bank of Australia's Deputy Governor Philip Lowe said the currency was overvalued.
Lowe also said that a further drop in the Australian dollar would help support economic growth, while making wages look less excessive by international standards.
The Aussie fell to $0.8532, its lowest since July 2010, and down almost 1 per cent on the day. Traders cited stop-loss sell orders being triggered at $0.8540.
Lowe said the lofty level of the local dollar led to concerns that wages in Australia were too high to be competitive.