The Australian dollar lost a cent overnight as commodity prices sunk on revised Chinese growth forecasts.
The Australian dollar dropped from US71.5&cent; in late trade on Tuesday to a low of US70.5&cent; before recovering to US70.8&cent; on Wednesday morning. 
Industrial metals such as key Australian export iron ore, which tumbled almost 2 per cent to $US56.2 per tonne, fell after a report by the Asian Development Bank which downgraded its growth expectations for China.
Copper fell 4 per cent, Brent crude oil shed 2.4 per cent to $US47.74 per barrel and zinc slipped to a five year low after losing 1.4 per cent.
National Australia Bank senior currency strategist Emma Lawson said the commodity pressures could continue.
"There was also pressure on commodities and thus commodity producers (Brazil's real is the worst-performing currency and commodity producer equities are under pressure) given the uncertainty about global growth and what is happening in China," Ms Lawson said.  
"That comes with no new information from China yet this week and which indeed has been relative stable. The AUD has been a little softer overnight, but if this theme catches on, it could be expected to underperform."
Another factor pushing the Aussie lower was the rallying greenback as the latter hit a two-week high against the euro as concerns about monetary policy tightening by the US Federal Reserve further swirled through market sentiment..
BK Asset Management director of foreign exchange strategy Boris Schlossberg said global currency movements were likely to be calmer and lacking momentum on Wednesday.
"With no major US economic releases on the docket today, the price action in the currency market may remain directionless for the rest of the day," Mr Schlossberg said.
"Generally volatility appears to be much more muted this week as market digest the FOMC data from last week and appear to have settled into comfortable ranges as they look for a new theme to trade."
Currency traders will be focused on the release of the Chinese manufacturing purchasing managers index due out by noon on Wednesday. 
"Given the weakness in the broader Chinese economy, the risks are tilted to the PMI disappointing expectations which should weigh on Australian dollar," Commonwealth Bank currency strategist Elias Haddad said.