The Australian dollar gained as much as US1c in overnight trade after the US dollar fell against all the major currencies.
The Aussie peaked at US96.71c in overseas trade overnight.
By 7am AEST it was trading at US96.34c, up from US95.51c yesterday.
IG Markets institutional trader Chris Weston said the US dollar was handing back some of the gains it made during the past four weeks.
"Everyone is saying that US stocks fell because of US Federal Reserve (economic stimulus) tapering concerns but that doesn't make sense to me," he said.
"It wasn't a specific issue, the US dollar was overbought and we saw a bit of a reversal over that."
This morning, official business investment figures for the March quarter will be released, which will include estimates of total investment for the current and next financial year.
The data from the Australian Bureau of Statistics is expected to show whether investment in Australia's mining sector has reached, or is close to, its peak.
Mining investment has been one of the key drivers of the Australian economy in recent years, and makes up about eight per cent of the economy.
Mr Weston said the capital expenditure intentions would be a major focus for markets on Thursday and a weak number will cause the Aussie to slide.
"We get the second revision for 2013-14, that was around $150 billion last time and there are downside risks to that, we could see it coming about $148bn," he said.
"If we get a number significantly below $148 billion on the future intentions the chances of a June rate cut increase."
