The Aussie fell swiftly to $0.5612, its lowest level since August 1998, after it broke key support in early afternoon trading but rebounded with 30 minutes to just under 57 cents.

The currency also came back to above 60 Japanese yen, having plunged to a five-year low of 59.37 yen."As you would expect, market rumours of RBA intervention," said Macquarie Bank currency strategist Jo Masters, when asked about the sharp bounce.

"Nothing is confirmed, and they don't even have to be," she said of the rumours.

At 3:20 PM, the Australian dollar was at $0.5662/67, comfortably off its lows, but still well down on Tuesday's late $0.5732/37.

The Australian dollar has struggled to make any gains in 2000, as a robust domestic economy and improved commodity prices have been overshadowed by an impressive US economy.After falling half a cent in offshore trade on euro weakness, the Aussie steadied on Wednessay near $0.5680, but came under renewed pressure when the RBA held rates steady after its monthly board meeting - even though this was widely expected. With the afternoon break of $0.5650, the previous low for 2000, analysts had expected the Aussie to target its record low of $0.5530, set on August 27, 1998.

But the rumours of price checking saw a very short market - where traders had sold the currency expecting to buy back at lower prices - scrambling to cover their positions.

Any intervention by the Reserve Bank would have been its first since the Aussie's slide from January's high of $0.6688 - a total fall of more than 16 per cent.In its annual report, issued on Tuesday, the RBA said it had not intervened in the foreign exchange market in 1999/00, although it had met some government foreign exchange needs from its own portfolio rather than sell more Australian dollars in the market.