The Australian dollar advanced against most major currencies in the Asian session on Monday on optimism over U.S. and Chinese economic reports showing global economic recovery.
Traders also eyed Reserve Bank of Australia's interest rate decision tomorrow in which interest rates are forecast to keep unchanged at the current level of 3.5 percent.
Data from the National Bureau of Statistics and the China Federation of Logistics and Purchasing said that China's services sector expanded for a fourth consecutive month in January. The non-manufacturing purchasing managers' index rose to 56.2 from 56.1 in December.
Employment in the U.S. increased by slightly less than expected in the month of January, according to a report released by the Labor Department on Friday, although the report also showed notable upward revisions to the job growth in previous months. The U.S. manufacturing activity, consumer sentiment and construction spending - all came in better than expected.
In economic news, a gauge of inflation in Australia was up 0.3 percent on month in January, TD Securities said today, slowing from 0.4 percent in December.
On a yearly basis, inflation is expected to come in at 2.5 percent in January, the data showed, up from 2.4 percent in the previous month.
Meanwhile, the total number of building approvals in Australia was down a seasonally adjusted 4.4 percent on month in December, the Australian Bureau of Statistics said on Monday, standing at 12,767.
That was well shy of forecasts for a 1.0 percent increase following the upwardly revised 3.4 percent increase in November (originally reported as 2.9 percent).
On a yearly basis, building approvals were up 9.3 percent - also missing forecasts for an increase of 14.9 percent after climbing 13.2 percent in the previous month
The aussie added 0.38 percent to hit 1.0441 against the U.S. dollar from last week's close of 1.0401. The next resistance level for the aussie-greenback pair is seen at 1.05.
Against the loonie, the aussie climbed to 1.0416, rebounding from last week's multi-week low of 1.0350. On the upside, 1.045 is seen as the next target level for the aussie.
The aussie that finished Friday's deals at 1.3130 against the euro advanced 0.57 percent to 1.3055. If the aussie extends gain, it may break 1.30 level.
In the European session, Eurozone Sentix investor confidence for February, U.K. construction PMI for January and Eurozone PPI for December are due.
At 10:00 am ET, U.S. factory orders data for December is expected.
by RTT Staff Writer
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