The Australian dollar broke through the US78¢ on Monday, benefiting from the disappointing durable goods report out of the US
Joint head of foreign exchange strategy at National Australia Bank, Ray Attrill, noted that traders were waiting to see how events unfolded over the coming week.
"It's where we left off on Friday ... US dollar weakness on Friday which in turn was linked to the perceived weakness of the US durable goods numbers. We also had a decent rally in the iron ore price that was evident in Friday's market," said Mr Attrill.
"There's been nothing to cause a reassessment of either of those factors at this stage."
Data due out this week includes a speech from RBA governor Glen Stevens as well as from the US quarterly GDP numbers and the Purchasing Managers Index (PMI) from the manufacturing sector.
Investors are also placing their bets on next week’s interest rate decision from the RBA and weather the central Bank will cut rates from 2.25% to 2.00%.
"Most economists are expecting a cut next week but the markets themselves are saying it's a 50-50 call," said Mr Attrill. "Anything that gives any sort of a steer on the likelihood of a move next week will be the source of the next half-a-cent move in the Australian dollar."
The market is predicting around a 50% chance that the Reserve bank of Australia will slash rates next
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