LONDON: The Australian dollar sank to a four-year trough against its US counterpart on Tuesday after the Reserve Bank of Australia's Deputy Governor Philip Lowe said the currency was overvalued.

Lowe also said that a further drop in the Australian dollar would help support economic growth while making wages look less excessive by international standards.

The Aussie fell to $0.8532, its lowest since July 2010 and down almost 1 percent on the day.

Traders cited stop-loss sell orders being triggered at $0.8540. Lowe said the lofty level of the local dollar led to concerns that wages in Australia were too high to be competitive.

Copyright Reuters, 2014