The Australian dollar has slipped against its stronger US counterpart as support firms for the Trump administration’s tax reform bill.

At 0635 AEDT on Monday, the Australian dollar was worth76.60 US cents, down from 76.72 US cents on Friday.

Westpac’s Imre Speizer says the US dollar rose amid positive sentiment following reports that key political holdouts would support the Republicans’ tax report bill.

‘The US dollar index closed up 0.5 per cent,’ he said in a Monday morning note.

‘(The) AUD fell from 0.7695 (a one-month high) to 0.7638. ‘

The main local event risk on Monday would be the mid-term Budget update, Mr Speizer said.

‘The mid-year budget update is expected by Westpac to show a reduced 2017/18 budget deficit estimate of $27 billion compared to the previous estimate of $29.4 billion.

‘This largely relates to the uplift in nominal GDP (gross domestic product) growth due to the boost from commodity prices.

The Australian Bureau of Statistics November new vehicle sales, due to be released Monday morning, seen by Westpac ‘to rise 0.5 per cent following a flat October’.

Mr Speizer said that if the local currency ‘retains upward momentum, the next technical target 0.7730 … unless the USD’s Friday rebound extends’.

The Aussie dollar is up against the yen and a little higher against the euro.


One Australian dollar buys:

* 76.60 US cents, from 76.72 on Friday

* 86.30 Japanese yen, from 86.11 yen

* 65.18 euro cents, from 65.12 euro cents

(*Currency closes taken at 1700 AEDT previous local session)