/www.fxserver.com/ THE dollar eased off three-year highs overnight as investors booked profits from its recent rally.
At 7am (AEST) the Aussie was at $US0.6187/92, down from 0.6204/09 at yesterday's local close.
A UK-based trader for a major Australian bank said profit-taking in London had placed downward pressure on the currency.
But the trader said it was only a modest correction and the local currency was still expected to move higher in the short term.
The dollar closed the London session near its lows at $US0.6180, but moved marginally higher throughout New York trading on the back of US dollar weakness.
The greenback slipped after the US Federal Reserve's Beige Book report showed a sluggish US economy.
The Fed said the economy continued to be "lacklustre" in March and April, with the onset of the Iraq war affecting sales and spending.
Dealers said the report had underscored concerns about the US economy which had been contributing to the US dollar's recent weak tone.
On the cross rates the Australian dollar was weaker against the yen, euro and British pound, but was slightly firmer against the New Zealand dollar.
Trade on the local market is likely to be quiet heading into the long weekend.
JP Morgan strategists said they expected the Australian dollar to have another run higher before topping out.
The local currency rallied strongly on Tuesday night, pushing to a high of $US0.6230 - a level not seen since February, 2000.