The Australian dollar benefited from improved commodities and risk in the offshore session, supporting the local unit as traders begin to short the greenback.

At the Asian open on Monday, the Australian dollar was trading at 75.47 U.S. cents, up from 75.32 U.S. cents at Friday's close.

The U.S. dollar was softer in Friday's offshore session as the futures market has shorted the greenback for the first time in two years, National Australian Bank global co-head of FX strategy Ray Attrill said.

However,  support for the Australian dollar is unlikely to go much further as the local market begins further re-pricing of a Reserve Bank of Australia (RBA) rate cut risk if there is not a rebound in labour force data later in the week.

Offshore risks will also weigh on the unit with traders eyeing Chinese economic activity data this week, while the greenback is likely to stabilise over the medium term once the U.S. Federal Reserve resumes its policy tightening.

"The Australian dollar should find support around the 100-day moving average of 72.56 U.S. cents should all the downside risks materialise," Commonwealth Bank of Australia currency strategist Joseph Capurso said.

At 0937 local time, the Australian dollar strengthened to 75.67 U.S. cents. 

Source:
courtesy of XINHUA NEWS AGENCY

by Xinhua News Agency

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