Rumors that George Soros was planning to short the Australia dollar has taken the wind out of the robust currency, fueling expectations that the tide is turning for the Aussie dollar.
The Aussie fell 0.6 percent against the U.S. dollar late Monday on a report in the Sydney Morning Herald that bets against the currency totaling $1 billion were placed via Hong Kong and Singapore, believed to be by Soros Fund Management. CNBC has not been able to independently confirm the rumor.
(Read More: Why Shorting the Aussie Is 'Trade of the Century' )
The selling momentum escalated Tuesday after the Reserve Bank of Australia cut interest rates by 0.25 percent to a record low of 2.75 percent. The currency dropped over half a cent to as deep as $1.0178, its lowest since early March.
While many analysts shrugged off the size of the rumored trade, they said talk that such a well-known and respected investor such as Soros was dabbling in currency markets will have weight.
"This can influence people's thinking, particularly private traders. Soros is a successful trader and when someone like him takes a view, many people re-examine their own views," said Ric Spooner, chief market analyst at CMC Markets Asia Pacific.
(Read More: Why the Aussie May Not Escape This Time )
According to David Greene, senior corporate foreign exchange dealer at Western Union Business Solutions in Sydney, the rumored move by Soros, who famously shorted the British pound back in 1992, could impact how traders view the Aussie in the long-term.
"He (Soros) is obviously very influential on currency markets. If markets get a whiff that he is intervening people start paying attention," said Greene.
(Read More: Should Australia Cut Rates? Markets Are Split )
The resilient Australian dollar has managed to overcome global headwinds in Europe and China to stay above parity against the U.S. dollar for most of the last two years. It has nearly doubled in value against the greenback since the low of $0.65 hit in October 2008.
Indeed, the stubborn strength of the currency is causing many market watchers to turn cautious.
Paul Gambles, managing partner at advisory firm MBMG International told CNBC last week that shorting the Aussie is the "trade of the century," as he sees little reason for further upside for the currency.
According to Spooner, "moderate growth outlook for the Australian economy and risks to Chinese growth" are key factors that could pressure the Aussie in the near term.
"It has limited upside particularly against the U.S. dollar," said Spooner. "We see it moving back to 98 cents to the dollar over the course of the next few months."
Won't Be Like the Pound
Still, analysts are downplaying comparisons made between the Australia dollar and the British pound. Back in 1992, Soros placed a $10 billion speculative bet against the U.K. pound and became universally known as "the man who broke the Bank of England."
According to CMC's Spooner, the size of the trade against the Aussie is not enough to move markets.
"$1 billion is not enough to move the market instantaneously, it is more likely to have a psychological influence," said CMC's Spooner.
"When Soros shorted the pound it had huge implications for the pound and the UK economy," Greene added. "I don't think this move will have the same impact on the Aussie, however, due to the relative size of the short position."
(Read More: Yen Selling May Become an 'Avalanche,' Soros Says )
More From CNBC