The Australian dollar held on to weekend gains during Monday’s local session despite a weak day on equity markets.
At the local close, the dollar was trading at $US0.8735, up 1 US cent, or 1.2 per cent, from Friday’s close of $US0.8633. During the day, the local unit moved between a high of $US0.8776 and a low of $US0.8722.
The Australian dollar traded higher during weekend offshore trading, benefiting from weaker than expected US economic growth data that prompted investors to sell the US dollar.
CMC Markets foreign exchange dealer Tim Waterer said trading on currency markets was subdued ahead of key US employment data due later in the week.
For the Australian dollar, weakness in equity markets was offset by firmer commodities prices such as gold.
‘‘For the most part today it was just business as usual for the Australian dollar, with traders acutely aware that the bigger movements may happen later in the week, culminating with Friday’s US jobs numbers,’’ Mr Waterer said in a research note.
The US non-farm payrolls report for June is slated for publication during Friday night’s (AEST) offshore session.
RBC Capital Markets senior currency strategist Sue Trinh said the risks for the Australian dollar remained ‘‘skewed to the downside’’ this week.
Ms Trinh said the market focus ahead of non-farm payrolls report would be on the expiry of the European Central Bank’s one-year 442 billion euros ($A625.89 billion) long-term refinancing operations on July 1.
‘‘It’s impact on the euro and other correlated assets like the Aussie dollar will be watched very closely,’’ Ms Trinh said from Hong Kong.
‘‘I would expect a fair amount of caution to prevail leading into the expiry.’’Ms Trinh described the G20 summit as ‘‘pretty much a non-event’’ for currency markets.
AAP