$A lower on equities and leadership

The Australian dollar has fallen as equity markets softened and uncertainty surrounded the leadership of the Australian Labor Party.

At 1.39pm AEDT on Thursday, the Australian dollar was trading at $US1.062, down from $US1.0671 on Wednesday.

Nomura head of foreign exchange Kurt Magnus said to AAP the Australian dollar was moving on these two trends, but would not stay down for long.

"It's not too exciting, but the market is trying to work out whether there are weaknesses in currency caused by politics, or caused by softer equity markets," he said.

"Either way, I don't think conditions are hugely obstructive for the Australian dollar – I think it will just hold its ground.

"We have to look at the US coming out of its recession, China slowing down slower than expected, and perhaps a revitalisation in the Japanese economy.

"This short-term weakness in the Australian dollar won't last, and the local currency won't do badly against the US dollar into next week."

On Wednesday night, Kevin Rudd announced he was resigning from his position as foreign minister, with a ballot for the Labor Party leadership to take place on Monday.

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AAP