The Australian dollar is higher amid market expectations of firm inflation figures for the March quarter.
At 1700 AEST on Tuesday, the local currency was trading at 93.67 US cents, up from 93.57 US cents on Thursday before the Easter long weekend.
The Australian dollar climbed throughout the day from a low of 93.22 US cents to an intra-day high of 93.72 US cents.
A lift in Asian equity markets along with investor positioning ahead of Wednesday’s major data releases gave the Australian dollar a boost, Commonwealth Bank currency strategist Peter Dragicevich said.
“People are positioning ahead of tomorrow’s consumer price index and the HSBC Chinese purchasing managers’ index,” Mr Dragicevich said.
“A lot of the banks are expecting a relatively firm CPI number and our estimates have the annual rate of inflation moving above the Reserve Bank of Australia’s target band for the first time since 2011.
“If that does come through, we would see market pricing for an RBA rate hike push forward and that would be good for the Aussie dollar.”
The headline CPI is expected to rise by 0.8 per cent in the March quarter for an annual rate of 3.2 per cent, according to an AAP survey of 12 economists.
The RBA has a target range for annual inflation of two to three per cent and the latest figures will inform its May interest rate decision.
