The Australian dollar has recovered some of its losses after comments from US Federal Reserve chairman Janet Yellen that an interest rate hike was still on the horizon.

At 4.10pm (GMT) the Aussie dollar was trading at US7021c up from US70.02c in yesterday’s trade.

In her latest speech Yellen noted that although the central bank didn’t raise rates this month it may still be appropriate to lift them before the end of the year,

"I anticipate that it will likely be appropriate to raise the target range for the federal funds rate sometime later this year and to continue boosting short-term rates at a gradual pace thereafter as the labor market improves further and inflation moves back to our 2 per cent objective," Ms Yellen said.

The Aussie dollar slumped on the news, threatening to break down through the US69c mark before recovering above US70c as traders pondered over the exact timing of a rate move.

Analysts from ANZ bank expect the RBA to cut interest rates in Australia from 2% down to 1.5% sometime next year with the Aussie dollar falling to US64c as weak global growth drags down the local economy.