Aussie dollar edges up at midday

The local unit has edged amid sharemarket buoyancy, but remains below US72c.

The Australian dollar has made a small recovery following a strong rally on Wall Street.

At 1200 AEST on Wednesday, the currency was trading at 71.82 US cents, up from 71.64 cents on Tuesday.

The Australian dollar was sold off after Reserve Bank governor Glenn Stevens flagged concerns about low inflation and China risks on Tuesday, but has since rebounded after a strong session for US shares, OANDA Australia and Asia Pacific senior Stephen Innes said. That may be an indication of a changing stance on an expected rate hike in the US in coming months.

“Shifting investor sentiment suggests the market is viewing a likely Fed move optimistically, inferring a rate hike would imply the Feds are very confident about the US economy,” Mr Innes said.

AAP