THE Australian dollar closed lower today after weakness on equity markets and a late rally on the back of a spike in the gold price.
At 1700 AEDT, the Australian dollar was trading at $US0.9196/98, down from Thursday's close of $US0.9238/42.
During the domestic session, the local unit traded between $US0.9152 and $US0.9215.
CMC Markets foreign exchange dealer Tim Waterer said the local currency took its lead from a spike in the price of spot gold around 1600 AEDT.
The local unit started weaker after a round of US dollar buying overnight and into the Asian session.
"That kept a lid on the Aussie dollar for the most part," Mr Waterer said.
"What we saw in the afternoon was a jump in the price of spot gold."
The rally came after the price of gold jumped from $US1139 an ounce to $US1144.
"That seemed to provide a lift to the commodity currencies such as the Australian dollar, so that's really been the main movement this afternoon," Mr Waterer said.
"Despite the continued weakness on the local borse, the Aussie dollar was able to move higher in afternoon trade just based on that stronger gold price.
"That's what the Aussie took the lead from".
The spot price of gold at the close of trade in Sydney was $US1145.10 an ounce.
In the absence of any significant US data due out in overnight trade, the Australian dollar would stay buoyant while gold pushed towards the $US1150 level, Mr Waterer said.
"The key factors in terms of the the Australian dollar will be how US stocks react after what was a disappointing Thursday and the direction of risk appetite tonight."
He said there had been no drop off in demand for gold.
"By and large gold continues to look very strong and the long-term forecasts are quite high as well, and that does bode well for the Aussie dollar in the short term."
Meanwhile, Australian stocks ended the week lower after falls across the board following losses on Wall Street and commodity markets.
The benchmark S&P/ASX200 index closed down 63.4 points, or 1.33 per cent, at 4685.8 points, while the broader All Ordinaries index lost 61.1 points, or 1.28 per cent, to 4706.7 points.
On the Sydney Futures Exchange at 1613 AEDT, the December share price index contract was 63 points lower, at 4695 on 18,495 contracts.
With little momentum from local news, traders were influenced by a sell-off in US stocks, triggered by a stronger US dollar and discouraging signs of a subdued US economic recovery.
Shaw Stockbroking senior dealer Jamie Spiteri said trade was stable, amid weaker volumes today.
"The market's predictably easier, but it's remained relatively stable at these lower levels," he said.
"The trading range for the day has only been about 10 or 15 points, so things have remained relatively steady despite the fact that share prices are on the lower side.
"Some of the falls have been across areas which have been weaker over the week, like the banking sector, and we're seeing some profit-taking in some of the resources as well."
Mining giant BHP Billiton lost 82 cents, or 2.01 per cent, to $40.03 and Rio Tinto was down $1.38, or 1.9 per cent, at $71.22.
Fortescue Metals Group lost eight cents to $4.22.
Among the major financial stocks, National Australia Bank dropped 23 cents to $28.69, Commonwealth Bank fell 32 cents to $52.76, ANZ was down 50 cents, or 2.25 per cent, at $21.75 and Westpac was 48 cents lower, down 1.94 per cent, at $24.20.
