THE Australian dollar has closed after comments from the central bank deputy governor convinced market observers the current cycle of interest rate rise may be near its peak.

At 1700 AEDT, the Australian dollar was trading at $US0.8983/91, down from Tuesday's close of $US0.9124/27.

The local unit traded during the local session move between $US0.9068 and $US0.8968.

4Cast Financial Markets economist Michael Turner said the unit slipped more than half a US cent after RBA deputy governor Ric Battellino said the cash rate of 3.75 per cent was now back to a "normal range" following recent rises in commercial bank deposit, housing and business lending rates.

He said that if interest rates in the broader economy were rising relative to the central bank's official cash rate "there is less need for the cash rate to rise".

Mr Turner said the market dipped on Mr Battellino's comments.

"February futures traded about a 60 per cent chance of a rate rise this morning, to 14.5 per cent (after the comments)," he said.

"It looks like a February rate rise is not going to happen."

Mr Battellino had said the cost of new funds raised by commercial banks had risen since the start of the global financial crisis relative to the cash rate set by the RBA.

The RBA lifted the cash rate by 25 basis points to 3.75 per cent on December 1 following similar moves in October and November.

Over the past year, currency traders have relied on Australia's relatively high interest rates to attract investors to local assets. Expectations that there might be a pause in the RBA's rate hike cycle saps strength from the local currency.

Also on Wednesday, the Australian Bureau of Statistics (ABS) released data that showed economic growth slowed in the September quarter.

Real gross domestic product (GDP) grew by a less than expected, seasonally adjusted 0.2 per cent in the September quarter and 0.5 per cent over the 12 months to September, the ABS said.

The national economy grew at an unrevised 0.6 per cent in the June quarter.

Financial markets had forecast a 0.4 per cent rise in the September quarter.

Mr Turner said the GDP data, which was released half an hour before Mr Battellino's speech, sent the local unit 0.15 of a cent lower.

During the offshore session, the US Federal Reserve is expected to make its monthly interest rate decision.

The US Federal Funds rate is in a target range of between zero to 0.25 per cent.

Market forecasters expect the US Fed to keep the rate steady at its historic low.

Mr Turner said investors would look for hawkish language in the Fed's accompanying statement about the future direction of interest rates.

He predicted the Australian unit could trade in a wide range between $US0.8900 and $US0.9070.

Meanwhile the Australian share market finished marginally lower, amid news the economy grew less than forecast in the three months to September.

The benchmark S&P/ASX200 index closed down 11.6 points, or 0.25 per cent, at 4,661.9 points, while the broader All Ordinaries index lost 11.7 points, or 0.25 per cent, to 4,676.1 points.

On the Sydney Futures Exchange at 1615 AEDT, the December share price index contract was 10 points lower at 4,654 on 62,317 contracts.

Austock Securities senior client adviser Michael Heffernan said the market had shown resilience by falling only a little, despite a poor lead from overseas markets.

"It is only a cigarette paper in a negative direction," Mr Heffernan said.

"The market has been treading water for some time now and I think it is very healthy we are getting movements of very small dimensions now rather than that huge volatility we have seen," he said.

He said new national accounts figures that showed the economy rose by a mere 0.2 per cent in the three months to September, less than expected, had hurt the market.

"That has had a slight negative impact, but we will roll over on that one and tomorrow will be a new day," Mr Heffernan said.

Economists' forecasts had centred on 0.4 per cent growth in the September quarter.

At 1615 AEDT shares in BHP Billiton were down five cents to $41.05 while rival Rio Tinto was off five cents to $70.80.

Among the gold miners, Newcrest dropped 48 cents to $35.41 and Newmont fell four cents to $5.58 and Lihir lost seven cents to $3.23.

The spot price of gold at 1615 AEDT was $US1,122.70 per fine ounce, down $US2.52 from Tuesday's closing price of $US1,125.22.