The Australian dollar fell below parity with the US dollar and stayed down during the whole week, which is widely attributed to positive indicators in the US economy.

On Friday, the Australian dollar took another step lower, falling as low as 97.33 US cents, a level not seen since June 2012.

The Australian dollar tumbled to 98.3 cents late on Thursday, breaking through its 11-month low of 98.5 cents on Wednesday.

Analysts here are saying that the government should do something about the exchange rate with some suggesting that 97 US cents per Australian dollar remains a critical level.

If that support is not forthcoming, the Aussie dollar could fall much further.

Australian dollar looks down on its luck but a lot of that is because of the US dollar, not lower interest rates, analysts said.

The US dollar is enjoying a golden run, sparked by the latest employment report, while a number of other central banks, including those in Australia, European Union and South Korea, have cut rates, which has made the greenback look cheap.

A little over a year ago, there was talk that the Aussie dollar would remain strong for years because of its newfound "safe haven" status as a proxy for the Asian region.

But in reality, there is only one safe-haven currency and that's the greenback, despite the debt and budget problems of the world 's largest economy.

Although there has been some diversification from global central banks during recent years, the US dollar remains as the world's strongest currency.

Sean Callow, currency strategist with Westpac Banking Corp., said offshore developments were affecting the value of the Australian dollar because there was little domestic economic data.

"It is going to be a good test of the notion that you should be buying US dollars because the Fed might start to tweak its monetary policy," said Callow.

Rumors that quantitative easing policy of the US Federal Reserve may be tapered off have helped drive the US dollar higher. The policy is designed to increase inflation and growth. It is also believed to lower the US dollar.

Currency market analyst Sean Keane said the lower dollar meant the Reserve Bank of Australia (RBA) would have made a profit on foreign currencies.

He said the RBA, between August and October last year, increased its foreign asset book by 1.4 billion dollars. "At current foreign exchange rates the RBA is now sitting on a profit of about 63 million from those transactions."

"It certainly will not be thinking about taking its profits yet, given its view on the degree of significant overvaluation that previously existed in the Australian dollar," Keane said.

If there is some disappointing economic data from the US, the recent rebound in the greenback will be short-lived and the Aussie might be back in favor.

According to HSBC, the Aussie against the greenback has fallen 75 per cent of the time in the month following the Reserve Bank's decision to cut its official cash rate.

But going against the Aussie is that commodity prices are no longer on the rise.

Bell Potter's strategist Charlie Aitken has told clients that the RBA lowering its growth and inflation forecasts are sizeable negatives and he believes the official cash rate could fall to 2 per cent, down from its current level of 2.75 per cent.

"In my view this is pretty simple: if the mining/resource investment cycle has peaked (which it clearly has), then so too has Australia's interest rate differential to the world. If the interest rate differential to the world has peaked, but particularly versus the USA, then the Australian dollar has also peaked for the cycle," said Aitken.

"Make no mistake, the greenback is back and the ramifications are large," he added.

The Australian dollar's next big move to have a more sustainable level below one US dollar will hinge on a turnaround in the US economy and the prospect of the Federal Reserve raising interest rates.

Conditions for the Australian dollar, one of the darlings of the foreign exchange market for the past few years, are about to change.

It's always difficult to make predictions in currency markets, but with signs emerging that the US dollar is poised for a comeback, life is going to get a lot tougher for the Australian dollar.