The Australian dollar rebounded from near one-month lows on Monday as a bout of profit taking in the local currency took a breather and bids emerged at lower levels from sovereign funds.
At close, the dollar was trading at $0.9047, from a low of $0.8907 earlier in the session and from $0.8984 late in New York on Friday, but still weaker than the $0.9145 seen late here on Friday.
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The Aussie was also supported by expectations the Reserve Bank of Australia (RBA) would raise its cash rate by 25 basis points to 3.5 percent at its monthly policy meeting on Tuesday.
The Australian dollar has a strong correlation with stock markets indices, like the Dow Jones Industrial Average, and both have risen to multi-month highs as investors bet big on riskier assets, bolstered by growing optimism about a global recovery.
