The Australian dollar rose more than one per cent on the day versus the US dollar on Thursday to hit a session high above 90 US cents, with traders citing talk of buying by a US investment house.
The Australian dollar rose to a session high of $0.9015, recovering from sharp falls on Wednesday after weak inflation data to take it back close to an 11-week high of $0.9069 hit earlier this week.
"There's a rumour of a huge Aussie buyer from a US investment house," a London-based trader said.
At the local close the Aussie dollar was buying 89.91 US cents, and recently changed hands at 90.04 US cents.
It was also worth 69.1 euro cents, 57.7 pence and 78.6 yen.
Since 0700 AEST, the domestic dollar traded between $US0.8906 and $US0.8994.
Commonwealth Bank of Australian currency strategist Joseph Capurso said the Aussie started to recover in London trade overnight.
''The Aussie is stronger across the board ... it's more of a recovery from the big sharp loss at the CPI (announcement) yesterday.''
The New Zealand dollar and the Australian dollar fell sharply after the Reserve Bank of New Zealand raised its official interest rate for the second time in less than two months.
The kiwi central bank also said prospects for economic recovery in that country had deteriorated.
However, the Australian dollar staged a recovery in the afternoon.
''It's well and truly made up for the losses incurred when the Reserve Bank of New Zealand raised rates and spoke very dovishly,'' Mr Capurso said.
''The reason it fell is because the comment that came with the rate announcement was perceived that they would not be increasing rates much more and that's what pushed down both the Kiwi and the Aussie.''
Mr Capurso said economic growth figures wer due on Friday night (AEST) and if the US reacted strongly, then the Aussie would fall.
At 1600 AEST, the RBA's trade weighted index (TWI) was at 69.5, up from Wednesday's close of 69.4.
Reuters, with AAP
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