The Australian dollar has shot back to more than US70Â¢, buoyed by strong Chinese trade data and after Beijing kept the yuan's reference rate stable for the fourth day.
The Australian bumped to US70.47Â¢, the highest since last Friday, after trading at lows of US69.74Â¢ on Wednesday morning. The Australian stood at 82.44 yen, up from a three-year trough of 80.84 against the safe-haven currency.
The currency edged higher after the People's Bank of China kept the reference rate little changed for the fourth consecutive day. It set the fixing, which restricts onshore moves to a maximum 2 per cent on either side, at 6.5630 a US dollar, 0.18 per cent stronger than the onshore yuan's official closing price of 6.5750 on Tuesday. 
"There's definitely been a reversal in overly negative sentiment as we've seen some stability in the bank's ability to manage the Chinese economy," Angus Nicholson, a foreign exchange analyst at IG Markets, said.
"The Chinese authorities have been very keen to bring down the spread between the onshore and offshore renminbi this week and they've been really successful at that," Mr Nicholson said.
The currencies of nations that depend heavily on commodity exports - including the Aussie - were hammered in the opening days of the year as an eight-day run of reductions in the yuan's reference rate spooked financial markets.
On Wednesday, the Australian currency extended gains on data showing China's exports increased 2.3 per cent in   December in yuan terms from a year earlier. Imports extended to 14 months of declines, falling 4 per cent in yuan terms. A trade surplus of 382 billion yuan ($83.1 billion) remains.
The numbers were much stronger than expectations. Economists had predicted a 4.1 per cent drop in exports and a 7.9 per cent slump in imports.
Equity markets have also calmed in recent days, allowing investors to cautiously look towards riskier assets, such as the Australian dollar.
And in the latest in a series of moves to stop the local currency from leaving the mainland, China's foreign-exchange regulator has verbally instructed some banks to limit outflows and reduce offshore yuan positions and liquidity, according to Bloomberg sources..
The People's Bank of China has intervened repeatedly in the offshore market via state banks this week to crack down on speculators, the sources said.
"The Aussie has been really hit by this negativity in China this past week and a half," Mr Nicholson said. "If we see stability in the management of the renminbi and in capital markets this coming week we may see the Aussie dollar pop up towards US72Â¢."
But while some sense of calm returned to foreign exchange markets, China's currency remains a key focus.
How long the PBoC would maintain a stable fix remained to be seen, ANZ said in a note on Wednesday. However the bank believed the fixings would be stable at least over the next few weeks.
Meanwhile financial markets are still betting Reserve Bank of Australia governor Glenn Stevens will stick to his "chill out" advice on interest rates, as 2016's 3.5 per cent drop in the Aussie dollar delivers the economy a boost.
Interest rate swaps signal a 16 per cent chance the central bank will move when it meets early in   February.