The Australian dollar fell half a US cent after the unemployment rate hit a 12 year high.
Its currency was trading at 92.97 US cents this afternoon, after hitting a high of 93.58 US cents in morning trade.
Australia's jobless rate jumped to 6.4 per cent in July, from 6.0 per cent in June, Australian Bureau of Statistics figures showed.
Economists had expected unemployment to remain unchanged.
The total number of people with jobs also disappointed, falling by 300, against expectations 12,000 jobs would be added to the economy.
LTG GoldRock director Andrew Barnett said the employment data was the catalyst for the Australian dollar's fall, but the currency was already due to drop.
"Any rally in the Aussie is going to be short lived," he said.
"We've got some decent momentum to the downside overall, based on the US economic recovery and speculation mounting on interest rate rises in the United States sooner rather than later."
Barnett the Australian dollar will also continue to weaken because an interest rate rise by the Reserve Bank of Australia is unlikely this year.
"I wouldn't be surprised to see the Aussie dollar back under 90 US cents before Christmas," he said.
The Australian dollar could come under further pressure when the Bank of England (BoE) and the European Central Bank (ECB) hold meetings on Thursday night, Australian time.
"ECB president Mario Draghi is not going to talk the euro up, he's going to talk it down and the Bank of England potentially could force the pound up if they talk about rising interest rates," Barnett said.
Meanwhile, the Australian bond futures prices were higher.
At 1200 AEST on Thursday, the September 2014 10-year bond futures contract was trading at 96.555 (implying a yield of 3.445 per cent), up from 96.485 (3.515 per cent) on Wednesday.
The September 2014 three-year bond futures contract was at 97.350 (2.650 per cent), up from 97.260 (2.740 per cent).