The Australian dollar is finding buyers after tumbling to a 1-month low last week

Photo: Patrick Riviere/Getty Images.

The Australian dollar has opened the new trading week on the back foot, although it still remains above the lows struck on Friday.

Here’s the scoreboard as at 8am AEDT:

  • AUD/USD 0.7583 , -0.0011 , -0.14%
  • AUD/JPY 86.31 , -0.08 , -0.09%
  • AUD/CNH 5.2294 , 0.0028 , 0.05%
  • AUD/EUR 0.7148 , 0.001 , 0.14%
  • AUD/GBP 0.6168 , 0.0002 , 0.03%
  • AUD/NZD 1.0791 , 0.0015 , 0.14%

Despite the early weakness, Joseph Capurso, senior currency strategist at the Commonwealth Bank, says that the Aussie may receive some short-term support in the days ahead, underlining the currency’s resilience right now despite the odds of a US rate hike on March 15 scaling fresh highs last week.

“AUD may receive some short term support following the RBA’s policy meeting on Tuesday and news over the weekend that China’s government is strongly committed to infrastructure investment in railway, road and water conservation,” he said on Monday morning.

While that may help to underpin the Aussie in the short-term, Capurso says that US dollar strength will still be the overwhelming trend this week, keeping a lid on the Aussie’s advance.

“Higher US yields ahead of the FOMC’s 15 March meeting should support the USD, particularly after the ECB meeting on Thursday,” he says.

The CBA now expects the Fed to hike in March and September “with the risk of an additional hike in December”.

That view was no doubt helped by remarks from US Federal Reserve chair Janet Yellen on Friday when she said that “the process of scaling back accommodation likely will not be as slow as it was in 2015 and 2016” this year.

AUD/USD Hourly Chart

Turning to Monday’s session in Asia, there’s plenty of Australian economic data on tap to whet the appetite of Aussie dollar traders with retail sales, ANZ job ads and the MI inflation gauge all set to be released.

Most interest is likely to fall on the retail sales report for January with economists expecting a rise of 0.4% following a 0.1% drop in December.

Given the RBA’s continued focus on the labour market and inflation outlook, the other reports also carry the potential to be more influential than usual.

Outside of the Australian data, the calendar is quiet in Asia and Europe before picking up slightly in North American trade.

US factory orders, along with revised durable goods orders for January, will both be released.

Given the relative dearth of market moving events, movements in US bond yields, along with those in the USD/JPY and Chinese financial markets, may drive movements in broader currency markets today.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.