The Australian dollar has traded within a narrow range ahead of the federal budget, in the absence of any major economic data.
At 1700 AEST on Monday, the local currency was trading at 93.66 US cents, up from 93.56 cents on Friday.
The Australian dollar was treading water between 93.49 and 93.74 US cents on Monday in the absence of any major currency drivers, FXCM market analyst David de Ferranti said.
The release of the federal budget on Tuesday could move the currency, he said.
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“Significant spending cuts would likely create headwinds for the domestic economy, and raise the likelihood that the RBA will refrain from raising rates, which in turn would be a negative for the currency,” Mr de Ferranti said.
But data from the Australian Bureau of Statistics on Tuesday, including housing finance and the residential property price index, were unlikely to affect the currency.
“Those figures may also fail to stir some volatility for the Aussie, unless we see a significant deviation from expectations,” Mr de Ferranti said.
“While the housing sector has shown considerable strength, the Reserve Bank is unlikely to act at this stage to cool the market as it contends with weakness in other areas of the economy.”
At 1700 AEST, the Australian dollar was at 95.43 Japanese yen, up from Friday’s close of 95.16 yen, and at 68.01 euro cents, up from 67.66 euro cents.
