The Australian dollar is higher, after bouncing back from heavy losses that saw it hit an almost three-year low overnight.
Early this morning the local unit was trading at 94.25 US cents, up from 94.02 cents on Tuesday.
The currency started falling on Tuesday following weak business confidence data and after the Bank of Japan opted against increasing its asset purchase program.
In overnight trade, the Australian dollar dropped as low as 93.26 US cents, its weakest level since September 2010.
HiFX senior dealer Dan Bell said the currency had since rallied with investors finding its low price attractive.
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“I don’t think it’s exactly data or comment driven,” he said from Auckland.
“I think it’s more positioning and profit taking against an oversold currency.
“The Aussie dollar had a big drop yesterday and it managed to find support.”
Bell said he didn’t expect the Australian dollar to fall far below 93 US cents in coming days because that appeared to be the level at which traders were prepared to buy the currency.
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The currency has fallen steadily in the past weeks after being at 105 US cents in early April.
“I think this is a big cleanout for the Aussie dollar, but, at some stage, it will find support,” he said.
