THE dollar opened slightly higher after a volatile session in which equities gained ground and the oil price fell.
The dollar appreciated against the yen, which was sold off heavily across the board after Japan intervened in its currency.
At 7am AEST today, the local unit was trading at 93.81 US cents, up from yesterday's close of 93.73 cents.
Since 7am AEST, the local currency traded between 93.50 US cents and 94.20 cents.
Canadian Forex corporate dealer Darren Richardson said overnight had been a "pretty volatile session".
"We saw the market being pulled between risk on and risk off investors," Mr Richardson said said from Toronto.
"We saw equities up slightly and curiously oil dropped over 1.5 per cent, pulling on the commodity currencies."
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Wall Street closed overnight with gains after jittery trade and weaker-than-hoped-for manufacturing data dampened recent optimism over the recovery of the US economy.
Japan made a surprise foray into currency markets overnight to reverse the yen's ascent, which has hampered companies like Toyota and Sony that are critical to the nation's economy.
The yen fell three per cent or more against major currencies including the US dollar, euro and British pound.
It was the yen's biggest one-day move against the dollar since the autumn of 2008, at the height of the financial crisis.
At 7am AEST, the dollar was at 80.42 Japanese yen, up from yesterday's close of 79.63 yen.
But Mr Richardson said while the dollar gained against the yen, trade between the US dollar and the yen had been pretty flat later in the offshore session.
"The yen was basically sold heavily in a unilateral movement across the globe," he said.
Mr Richardson forecast a steady day for the local currency, with the release of domestic consumer inflationary expectations unlikely to have a big impact on trade.
"I think they will be waiting out for Friday's consumer price index (CPI) in the US which will have a big impact on the Australian dollar on Thursday evening."
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