Investing.com - The Australian dollar edged higher against the U.S. dollar on Monday ahead of the Reserve Bank of Australia’s rate review on Tuesday, amid expectations that it would keep interest rates on hold.
AUD/USD hit highs of 0.8772 and was last up 0.11% to 0.8761. The pair fell to lows of 0.8693 on Friday as concerns over emerging markets weighed.
The pair was likely to find support at 0.8693 and resistance at 0.8822, Friday’s high.
The RBA was expected to shift its stance away from lower rates on Tuesday after recent economic data indicated a pickup in consumer spending and business conditions and continued strengthening in the housing market.
The Aussie remained supported after data released on Monday showed that domestic building approvals fell 2.9% in December, compared to expectations for a 0.3% decline. Approvals for houses fell for the first time in four months but still ended 2013 up 17.8% on a year-over-year basis.
The Aussie received an additional boost after official data released over the weekend showed that China’s manufacturing purchasing managers’ index ticked down to 50.5 in January from 51.0 the previous month, in line with market expectations.
Although the reading was a five-month low it was stronger than revised data last week showing that China’s HSBC manufacturing index ticked down to a six-month low of 49.5 this month.
A separate report on Monday showed that China’s official services PMI slowed to 53.4 month, from 54.6 in December.
Elsewhere, the Aussie was little changed against the yen, with AUD/JPY edging up 0.02% to 89.40 and was fractionally lower against the New Zealand dollar, with AUD/NZD slipping 0.08% to 1.0810.