The Australian dollar was higher at noon, with overnight gains offsetting a worsening in the nation's trade balance in May.

At 1200 AEST, the local currency was trading at $US0.8074/76, up from Wednesday's close of $US0.8061/64.

During the morning, the unit moved between $US0.8057 and $US0.8099.

ANZ Banking Group senior economist Katie Dean said the Australian dollar had a short sell-off following worse-than-expected trade data.

The Australian dollar was trading around $US0.8077 just before the release of the trade data at 1130 AEST, then slipped to its intra-session low of $US0.8057 two minutes later.

The nation's balance of goods and services was a deficit of $556 million in May, seasonally adjusted, from a downwardly revised deficit of $282 million in April, figures from the Australian Bureau of Statistics (ABS) show on Thursday.

During the month, exports were down 5.0 per cent in adjusted terms, while imports were down 4.0 per cent.

Economists had been expecting a deficit of $125 million for May.

It was the second consecutive month Australia has posted a trade deficit, following eights months of surpluses.

"We have taken a bit of a hit after the trade data came out, but that was reversed immediately" Ms Dean said.

The local currency started the domestic session at $US0.8081/85 at 0700 AEST.

Ms Deans said the currency had traded in a narrow range, with resistance around $US0.8060.

"We have drifted a little bit lower over the course of the morning," Ms Deans said.

"We are finding strong support around $US0.8060, with a lot of buying interest around that level," she said.