The Aussie quickly regained its footing, rising back to trade near US64.50¢ before rallying through the afternoon to trade near US65.50¢.

By the end of the session it had weakened slightly to US65.10¢.

"It has all the hallmarks of being linked to Japan," said Westpac senior currency strategist Sean Callow.

"Japanese investors like the Aussie dollar. But what evidence we have is it looks though it was an exit of positions, a closing out a lot of positions that were suddenly reversed. That's what the charts suggest because we didn't see anything very relevant [on the news wires]."

The Australian dollar has largely shrugged off a heavy fall in the price of oil which had sparked selling in other major oil sensitive currencies such as the Norwegian krona.

"It had the hallmark of forced exits rather than a carefully considered decision based on the merits of individual currencies," said Mr Callow.

Other global currencies were also victims of the flash crash, with the New Zealand and Canadian dollars also collapsing within the space of a few minutes.

The volatility only underscored the shock being felt across global markets, with the price of Brent crude plummeting and global sharemarkets going into free fall on Monday.

The $A is set to remain under pressure for some time, with the chance of the RBA cutting rates another quarter-percentage point on April 7 rising to 84 per cent on Monday from 78 per cent on Friday. The Reserve Bank of Australia cut rates a quarter point last Tuesday to a record low 0.5 per cent.

Adding to the pressure is NAB's change in policy view. The bank said it now expects the RBA to adopt unconventional monetary policy in two months time, forecasting the central bank will commence "yield curve control" in May.