The Australian dollar has dropped below US79¢, and lost ground against other major currencies, as rising geopolitical tensions on the Korean peninsula sparked a rush into safe-haven currencies such as the Swiss franc and Japanese yen.

The local currency fell as low as US78.55¢ and was fetching US78.68¢ in late trade on Thursday. The Aussie rallied 8 per cent from mid-May to late July, topping US80¢ at the end of last month, but it has apparently run out of upward momentum for now.

"The Australian dollar fell against all of the other majors for the first time since early July," AFEX trader Sam Choucair said.

The Aussie lost 0.4 per cent against the euro and the New Zealand dollar and 0.6 per cent against the Japanese yen.