The Australian dollar edged slightly lower on Thursday, despite clawing back most of its sharp early drop after signs from the US Federal Reserve that it would start lifting interest rates as early as April next year.
In late local trade the Aussie was fetching US81.30¢, compared with US81.50¢ at the same time on Wednesday.
The domestic currency touched a fresh four-and-a-half year low of US81.08¢ before local trading began, after US Fed chair Janet Yellen clarified Federal Open Market Committee comments around the timing of long-awaited monetary tightening "for at least the next couple of meetings".
Speaking to reporters, Ms Yellen was asked to elaborate on a statement in which Fed policymakers thought it was "unlikely" the economy would show enough vigour to justify the first rate increase since 2006 "for at least the next couple of meetings".
She said this meant "two meetings", which the market interpreted as the third FOMC meeting of the year, at the end of April.
Despite this hawkish moment, the Fed, for the most part, was cautious with its language as it looked to avoid further unsettling emerging markets, which have been volatile this week.
Another calming influence came from Moscow, where the Russian government and central bank unveiled a raft of measures designed to restore faith in the country's financial system after dramatic falls in the rouble this week.
The emergency action includes the promises of liquidity injections, looser capital requirements and the prospect of recapitalisation for the banking system.
The banks, which have suffered a run on deposits in recent days, have also been allowed to calculate the value of the securities they hold using pre-crisis prices, and delay setting aside provisions against distressed loans.
The rouble recovered 12 per cent against the greenback.
