The Australian dollar is higher ahead of a busy week of major economic news.
At 1200 AEDT on Monday, the currency was trading at 87.70 US cents, up from 87.47 cents on Friday.
In morning trade it moved between 87.44 US cents and 87.78 cents.
OzForex chief currency strategist Jim Vrondas expects the Australian dollar to test the bottom of the range it has been stuck in for the past month, especially if the Reserve Bank appears reluctant to raise the cash rate too soon.
On Tuesday the Reserve Bank releases minutes of its October board meeting, and RBA deputy governor Philip Lowe will give a speech in Sydney.
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September quarter inflation figures are released on Wednesday and RBA governor Glenn Stevens will give a speech on Thursday.
“The Australian dollar has been trapped between 86.50 US cents and 89 cents, it’s sitting in the middle of it now but if Stevens and company err on the dovish side then we could test 86.50 again this week,” Mr Vrondas said.
The latest inflation data is expected to show a softening, which would also weigh on the Australian dollar, he said.
The Australian share market remains one per cent higher due to stronger commodity prices and positive leads from overseas markets.
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Key commodity prices also rose, providing a boost for local mining stocks, CMC Markets chief strategist Michael McCarthy said.
“Those strong leads from overseas markets are a big factor but just as important are the strong leads from commodity markets,” he said.
“Iron ore, copper and oil prices moved up on Friday and that speaks to our resources sector nicely.”
BHP Billiton was 44 cents higher at $33.84, Rio Tinto had climbed 38 cents to $59.75 and Fortescue Metals was up three cents at $3.47.
The energy sector was also stronger, with Santos up 20 cents at $12.92 and Woodside 25 cents higher at $39.83.
The market was also being lifted by the banks, with Commonwealth up 63 cents at $77.17, ANZ up 53 cents at $32.46, Westpac up 45 cents at $33.55 and National Australia Bank was 41 cents higher at $33.56.
Telstra had gained 3.5 cents to $5.415.
Shares in Ten Network and Fairfax Media were boosted by media reports the broadcaster and publisher have held merger talks.
Ten was up 1.5 cents at 22 cents and Fairfax had added three cents to 81 cents.
Mining services provider Ausdrill was down 10 cents at 77 cents after it warned its annual earnings will slump by up to 13 per cent.
