The Australian dollar is still higher after getting a boost from better US employment figures, increasing optimism about the America’s economic recovery.
At 1700 AEST on Monday, the local unit was trading at 102.72 US cents, up from 102.54 cents on Friday.
The Australian dollar rallied at the end of last week after US economic data showed the country’s unemployment rate fell 0.1 per cent to 7.5 per cent in April.
But during local trade on Monday morning the currency fell as low as 102.72 US cents after official figures showed local retail spending fell 0.4 per cent in March, but was up 2.2 per cent in the March quarter.
CMC Markets senior trader Tim Waterer said the US payrolls figures were warmly received by Asian markets on Monday morning.
“The US jobs data gave the global growth landscape a more convincing appearance, commodities received renewed buying interest and this is reflected in the performance of resource stocks,” he said.
“Despite a push higher on Friday night after the US jobs number, the Australian dollar gave back ground today with a potential interest rate cut on the cards over the coming month or two.”
The RBA has its May board meeting on Tuesday.
All 13 economists surveyed by AAP last week said they don’t think the RBA will reduce the cash rate from its current level of three per cent but the futures market is pricing in a 57 per cent chance of a cut.