The Australian dollar has recovered much of its losses suffered after plunging to near six year lows following the Reserve Bank’s decision to cut rates.

At 0700 AEDT on Wednesday, the local currency was trading at 77.93 US cents, up from 76.63 cents on Tuesday.

The Australian dollar fell as low as 76.26 US cents overnight, its lowest level since May 2009, after the RBA cut the cash rate 25 basis points to 2.25 per cent on Tuesday, its lowest ever level.

Bank of New Zealand, currency strategist, Raiko Shareef said the Australian dollar had managed to regain all its RBA induced losses, thanks to a weaker US dollar. Optimism around a new Greek debt deal, rising oil prices and more disappointing economic data out of the US were weighing on the greenback, he said.

“It was, overall, a really quite sharp shift in market sentiment and one that was profoundly negative for the US dollar,” Shareef said. “So, all the G10 currencies were up against the US dollar.”

AAP