The Australian dollar has opened firmer yet at its lowest opening level in eleven months as traders locked in profits ahead of key overseas data later in the week.
At 0700 AEST, the Australian dollar was trading at $US0.8359/64, up from Wednesday's close of 0.8282/86.
Overnight, the local currency traded between $US0.8249 and US0.8404.
It was the local dollar's lowest opening level since September 18 last year, when it started the local session at 0.8334/40.
Bank of New Zealand currency strategist Danica Hampton said the Australian dollar rebounded after an earlier slide as investors booked profits from positions on the local currency.
Ms Hampton said some had been eager to lock in profits ahead of the key data at the end of the week.
"Currency markets have been manic in the last two days," she said from Wellington.
"Overnight, we have some seen real money demand from custodial accounts.
"Also, people were eager to take profits ahead of (US) non-farm payrolls on Friday, and the European Central Bank and Bank of England rate decisions tonight."
Ms Hampton said it was hard to pinpoint an "economic fundamental" for the recovery in the Australian dollar overnight.
"It is really just a function of market positioning and profit-taking," she said.
Late in Wednesday's local session, the Australian dollar fell to $US0.8233, its lowest level in a year on a bout of risk aversion in Japan, Ms Hampton said.
"Yesterday, the Aussie had the skids with heavy Aussie/yen selling out of Japan," she said.
"Basically on the back of Asian equity market losses."
The US dollar firmed against the euro overnight after a US government report showed factory orders rose more than expected in July to display more health in the Amercian economy.
The US Department of Commerce said new factory orders rose by 1.3 per cent in July, the fifth rise in a row.
Gains in the US dollar were tempered, however, after the US Federal Reserve's picture of business conditions across the nation, known as the "Beige Book" was released.
The report said consumer spending was slow in most regions and business conditions were said to be "weak" or "soft".
On Thursday, the Australian Bureau of Statistics releases the international trade in goods and service for July, with the market forecasting a $150 million surplus, down from the previous month's $411 million.
Ms Hampton expects further profit taking on the Australian dollar during Asian trading, with the unit to move between $0.8300 and possibly push above 0.8400.
