MUFG Research sees a scope for AUD to stay supported around this week's AU Q4 CPI print.
"The Australian dollar has clearly benefitted from building optimism over a stronger rebound for China’s economy this year. It has already lifted the AUD/USD rate back above the 0.7000-level for the first time since the summer of last year. The recent strengthening of the Australian dollar has been supported by favourable terms of trade developments for Australia," MUFG notes.
"It comes ahead of the release tomorrow of the latest Australian CPI report for Q4 which is expected to show that inflation has not yet peaked in Australia. A stronger report could provide another tailwind for the Australian dollar by reinforcing expectations for another 25bps hike at the RBA’s next policy meeting on 7th February," MUFG adds.