The Australian dollar is threatening to fall to the lowest level since the global financial crisis, despite the US Federal cutting interest rates for the first time since December 2008 on Wednesday.

The local unit fell to a six-week low of $US0.6832 against the US dollar, down sharply from the session high of $US0.6899 it hit following the release of Australia's slightly stronger-than-expected June quarter consumer price inflation report.

Federal Reserve chairman Jerome Powell has warned the link between falling unemployment and higher inflation is now a "faint heartbeat". Credit:AP

"The Australian dollar has gone from hero to zero," said Ray Attrill, Head of FX Strategy at the National Australia Bank.

"The post-Fed US dollar reaction has seen the 'battler' sink back to $US0.6832, so perilously close to taking out both the January 2016 and June 2019 lows."