The Australian dollar ended firmer for the first time in 10 days as a co-ordinated rate cut by major central banks helped stem the currency's recent plunge.
In the overnight session, the currency slipped to a five-year low of 64.54 US cents.
At 1700 AEDT, the Australian dollar was trading at 69.22/27 US cents, up from yesterday's close of 68.32/36, and recently traded at 69.39 US cents.
During the day, the local currency traded between 66.46 and 69.43 US cents.
A coordinated effort by some major central banks to cut their key interest rates helped the local currency regain some recent lost turf.
The US Federal Reserve, Bank of England, European Central Bank, Bank of Canada and Sweden's Riksbank all announced a 50 basis point cut to their official interest rates.
China's central bank also lowered a key lending rate by 27 basis points.
ANZ currency strategist Tony Morris said a recent plunge in the Australian dollar was curtailed today as there was a slightly better tone to markets.
After last night's co-ordinated rate cut, the central banks of South Korea and Taiwan followed suit today.
The Bank of Korea cut its key interest rate by 25 basis points to 5%, while Taiwan's central bank lowered its discount rate to 3.25%.
``What we have seen in the previous three overnight sessions has been so extreme, that we were overdue,'' he said.
``The co-ordinated rate cut last night, also the Bank of Korea and Thailand today all helped the Aussie stage a bit of recovery after the monumental moves in recent days.''
An indicator of the market's sentiment to risk is the Australian dollar/Japanese yen cross trade, Mr Morriss said.
Investors looking for higher risk would place their funds in equities than on bonds, and the Australian dollar reflects increased appetite for risk among investors.
``It has a very high correlation with stock market moves,'' he said.
The Australian dollar started this week at 80.45/55 yen, and slipped under 64 yen during London trade last night.
This represented more than 20% fall in the Australian dollar against the Japanese yen this week.
It closed the local session at 69.22/27 yen against yesterday's close of 68.24/31, and recently traded at 69.9 yen.
Australia's unemployment rate rose 0.2 percentage points to 4.3% in September, the Australian Bureau of Statistics (ABS) said today.
The jobless rate was in line with market forecasts.
``It did not seem to get too much notice,'' Mr Morriss said.
Tonight's gaze would be on the equities for currency markets to take direction, Mr Morriss said.
``The key for tonight will be how stock markets perform as markets continue to digest those co-ordinated rate cuts.''
AAP
