$A follows US stocks higher
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SYDNEY, Feb 4 AAP
February 04 2013, 07:33AM
The Australian dollar is slightly higher following rallies on US share markets on Friday night.
At 0700 AEDT on Monday, the currency was trading at 104.07 US cents, up from 103.99 US cents on Friday.
The Australian dollar fell as low as 103.61 US cents late on Friday after weaker-than-expected Chinese manufacturing data raised expectations the Reserve Bank of Australia (RBA) would cut the cash rate at its monthly board meeting on Tuesday.
The cash rate is currently at 3.0 per cent following a total of 1.75 percentage points in cuts between November 2011 and December 2012.
But HiFX senior trader Stuart Ive said the currency rebounded after stronger US manufacturing data helped push stock markets higher.
The Institute for Supply Management manufacturing index rose from 50.2 to 53.1 in January, its highest level in nine months.
The manufacturing figures helped offset softer January employment figures and provided a boost for the Dow Jones, which closed above 14,000 points for the first time since October 2007.
"Certainly, the data out of the US on Friday added a positive tone to the market, which lifted the Aussie dollar off its lows," Mr Ive said.
Mr Ive said the Australian dollar would probably move higher during the week with a likely boost from a string of domestic economic data due to be released.
He said key events for the currency would include the RBA's meeting on Tuesday, the release of December retail sales figures on Wednesday and January employment figures on Thursday.
"There is a lot going on, but, broadly speaking, I think risk sentiment is positive and there is potential for the Australian dollar to move higher here."