The Australian dollar was battling to sustain a rally on Friday after a bounce in equities helped it recover some of the week's hefty losses, though fears of a global recession meant risks still lurked on the downside. In late trade, the local dollar was resting at $0.6559, having climbed to as high as $0.6695 earlier from a low of $0.6340 on Thursday.
The bounce recouped some of the week's wild fall, with a dearth of liquidity creating extreme volatility. So dysfunctional was the market that the Reserve Bank of Australia (RBA) intervened to buy the Aussie on Wednesday and Thursday, helping steady it if only for the moment.
The Aussie also clawed back to 63.70 yen, from lows around 60.20, and enjoyed a big bounce on sterling, reaching 44.25 pence on fears the UK was heading for a deep and painful recession. Aiding the Aussie was a sudden spike in US equities where the S&P 500 shot up 11 percent from its intra-day lows on Thursday, apparently on bargain-hunting. Asian stocks followed to some extent, though the local market could only manage a 1.5 percent increase.