The Australian share market has ended its day with strong gains, and managed to claw back all of yesterday's steep losses.

The ASX 200 index jumped 1.6% to close at 7,059 points, with almost every sector posting gains.

The US dollar was on the back foot after a steep spike overnight, with investors keenly awaiting minutes from the Federal Reserve's most recent meeting to gauge the path forward for interest rates.

"The market has made a pretty tentative start to the year ... [and] is still grappling with the notion of what we are going to see from the Fed this year," said Rob Carnell, head of ING's Asia-Pacific research.

"There are two camps out there and they are wrestling for dominance in terms of the view.

"Some days higher-for-longer wins some days higher-then-lower camp wins."

Minutes from the Fed's December meeting, when it cautioned rates may need to remain higher for longer, are due to be released later on Thursday morning (AEDT).

Markets are pricing in US rate cuts for late 2023, with fed fund futures implying a range of 4.25% to 4.5% by December.

The US dollar index, which measures the greenback against six other currencies fell 0.2% (after rising 1% overnight).

Coversely, the Australian dollar jumped 0.9 per cent, to 67.9 US cents (after dropping more than 1% overnight).

Oil prices steadied after diving 4% overnight, the largest daily decline in more than three months - weighed by weak demand data from China, a gloomy economic outlook and a stronger US dollar.

Brent crude was steady at $US82.13 a barrel.

Spot gold rose 0.3% to a six-month high of $US1,845 an ounce.