The Australian dollar made a solid rebound from its offshore low as support for the US dollar after China's surprise rate hike proved short-lived ahead of Friday's US growth report.
The Aussie fell to 73.68 US cents offshore from around 75 US cents and near to this week's six-month high, but subsequently rallied to a peak of 74.75 cents in local trade.
"It's safe to say that FX rate movements in the last few days have been reasonably sharp, at least for the intraday traders," said ANZ Investment Bank strategist Craig Ferguson.
"The reversal from the $0.7360 area has been pretty severe, and as a result, there's no clear evidence of a trend change just yet, despite the break of what we perceived as support at $0.7420. New highs over $0.7510 remain possible," he said.
The AUD was $0.7459/62 compared with $0.7493/98 late here in Thursday. The Aussie has been in an upward trend since $0.6850 cents in September.
Local credit data showed housing credit had slowed to its slowest pace since April 2000, but at 17.7 percent economists said this was still a chunky figure. They are still divided as to whether it will be enough to soothe the central bank.
The Reserve Bank of Australia holds its monthly board meeting on Tuesday, but economists give only a 10 percent chance of it lifting its cash rate next week.
Economists in a Reuters poll put a 30 percent risk of a move at the December meeting, rising to 50 percent in March quarter 2003, albeit down from 60 percent in a previous similar poll following this week's unexpectedly benign inflation data.
The USD rallied initially on China's unexpected rate hike before the market decided it did not alter current dollar-bearish fundamentals. US third quarter gross domestic product is due later on Friday.
The Aussie bounced back as the USD sagged after a European Central Bank source said the Bank would not intervene to curb the strength of the euro unless market moves become more "extreme".