The gains attained by the Australian dollar to reach parity along with the US dollar had been wiped away by the volatile pessimistic markets.

The Australian dollar lost 4 percent since Friday that an 8.9 earthquake hit Tokyo, Japan and redounded to weak trading. The Aussie slid to a four-month low earlier today of just over 97 US cents before slightly gaining.

On Wednesday's trading, the Australian dollar ended at 99.6 US cents after reaching almost the parity levels with the US dollar.

Analysts said there are a number of factors that dragged the Australian dollar down, which was set forth by the biggest earthquake in Japan and the continuing unrest in the Middle East.

One of these factors is the shift in the outlook of cash rates, which analysts are now predicting to move up ahead than earlier foreseen.

"Interest rates may be considered to increase because this would raise the currency's value and be more attractive to international buyers," an currency analyst at HSBC Hong Kong said in an interview.

The analyst further noted that Japan's lingering turmoil as an aftermath of the earthquake will urge Japanese investors to pour money back to their country and this deleveraging and further risk aversion will have a negative impact to the Australian dollar.