The Australian dollar is hovering below 81 US cents, having staged a recovery after reaching five and a half year lows.

At 0700 AEDT on Tuesday, the local currency was trading at 80.92 US cents, up from 80.50 cents on Monday.

A combination of weak commodity prices and US dollar strength left the Australian dollar struggling on Monday.

The currency fell as low as 80.35 US cents, its lowest level since July 2009.

But the Australian dollar has since managed to regain some ground, ANZ senior currency dealer, Alex Sinton said.

“Essentially, those that perhaps had shorted the currency earlier were taking back some of those shorts,” Sinton said.

“The outlook as far as the day is concerned is probably more trading around the 81 cent level.”

AAP