The Australian dollar has been swathed in bearish sentiment in recent months, but the tide could be turning for the battered currency as analysts find increasing reasons to be optimistic.
Concerns over a slowdown in China, the end of Australia's investment boom and a dovish central bank pummeled the currency to its lowest level since August 2010 earlier this month, a 14 percent decline year to date.
(Read more: It seems the only way is down for the Aussie)
Although the Aussie edged down slightly on Wednesday to $0.8925 as fears over escalating tensions surrounding Syria prompted a bout of risk aversion, traders say the currency has held up relatively well and is expected to start stabilizing over the rest of the year.
(Read more: Syria rattles global markets for second day)
"The broader China slowdown story and the impact that was having on commodities do seem to be running out of momentum for now... and that should support the Aussie," said John Horner, FX strategist at Deutsche Bank.
Sean Callow, senior currency strategist at Westpac bank, said he has been surprised by the relative resilience of the currency compared to other emerging markets amid the recent selloff in the region.