THE Australian dollar gained half a US cent after Chinese economic data showed strong retail sales, factory output and investment.
At 5pm (AEST) today the Australian dollar was trading at 106.35 US cents, up from 106.06 cents on Friday, but was trading below that mark before the data release.
Since 7am (AEST) today the local unit traded between 105.70 US cents and 106.53 cents.
Commonwealth Bank currency strategist Joseph Capurso said the Chinese data augured well for the demand for Australian commodities.
"It was pretty good data all up from China,'' he said.
"What that mean is, it's looking pretty good for commodities demand and pretty good for the Aussie.''
Output from the China's thousands of workshops and factories rose 13.3 per cent from a year earlier in May, amid electricity shortages and a government clampdown on bank lending.
Fixed asset investment for the January-May period rose 25.8 per cent and retail sales rose 16.9 per cent year-on-year in May.
China also released its official consumer price index (CPI), which rose 5.5 per cent in May - the highest inflation rate in nearly three years.
Mr Capurso said the market would be looking to Reserve Bank of Australia (RBA) governor Glenn Stevens' speech tomorrow to get some insight into his views on how the Australian economy was going.
Mr Stevens is due to address the Economic Society of Australia in Brisbane tomorrow.
"The risk is that he's a bit more optimistic (on the economy) and that will give the Aussie a boost,'' Mr Capurso said.
Mr Capurso said the currency was likely to trade between 105 US cents and 107 US cents over the next 24 hours.
The Australian dollar reached 110.11 cents last month, the highest since the currency was floated in December 1983.
The RBA's trade weighted index was at 77.2, up from 76.8 on Friday.
