The Australian dollar has lost ground as traders book in profits amid predictions the currency could soon bounce as high as US95c.
At 5pm (AEDT), the local unit was trading at US92.31c, down from US92.66c on Friday.
OZForex chief currency strategist Jim Vrondas said the Australian dollar was due for a pullback after last week's strong rally, but there's a good chance it could climb as high as US95c on any hints from the RBA of pending interest rate rises.
The Reserve Bank will hold its monthly board meeting tomorrow and is widely expected to leave the official cash rate on hold at a record low 2.5 per cent.
"I don't think the market has fully priced in the full extent at which interest rates will rise over the next 12 months," Mr Vrondas said.
"We could get an indication this week from the RBA of exactly how interest rates could move over the next 12 months and I think they'll start talking the market into higher interest rates."
The currency had dropped largely because investors took profits ahead of the release of major economic data in the coming days, ANZ senior FX strategist Daniel Been said.
"The Australian dollar has come quite a decent long way and is at multi-month highs ahead of a very, very big week of data," he said.
"There's just a bit of profit taking ahead of a pretty important week."
US and Chinese manufacturing figures are due out tomorrow.
