The Australian dollar hits a 6-month high, up 10% since January

Photo by Robert Cianflone/Getty Images Nothing, not even a 9% plunge in the iron ore price, seems to be able to derail the Australian dollar's rally at present.

Overnight the AUD/USD rose to as high as .7523, marking the first time the Aussie traded above the 75 cent level since July 6 last year.

While it has since fallen back to .7482 courtesy of profit taking and the surprise decision from the RBNZ to cut interest rates earlier today. From the low of January 15 to the high struck overnight, the Aussie rallied more than 10% against its US counterpart.

With a relative dearth of Australian economic data for the rest of the week, Elias Haddad, currency strategist at the CBA, believes that tonight's ECB policy meeting, along with upcoming data from China, will determine whether the Aussie dollar rally will continue in the days ahead.

"There is no Australian economic data released over the rest of the week. As such, AUD movements will be heavily contingent on broader market risk sentiment, and market reaction to the ECB policy decision, says Haddad. "Our base case is for the ECB to cut the deposit rate by another 10bps to -0.4%, announce an extension of its LTRO and/or adjust its asset purchase program."

Haddad believes that a dovish outcome, such as the one outlined above, will be US dollar supportive, potentially weighing on the Aussie as a consequence.

Aside from the ECB meeting, Haddad believes China's upcoming economic data dump - scheduled for Saturday afternoon AEDT - will be influential on risk assets, including the Australian dollar, early next week.

"The next major signpost for the AUD will be the Chinese activity data batch (fixed asset investment, industrial production and property construction volumes) for January-February," says Haddad. "Worries about softer Chinese economic activity following the recent sharp contraction in exports could weigh on global risk sentiment early next week."

Here's the current Australian dollar scoreboard as at 9am AEDT.

• AUD/USD 0.7482 , 0.0044 , 0.59%
• AUD/JPY 84.76 , -0.10 , -0.12%
• AUD/CNH 4.8708 , -0.0017 , -0.03%
• AUD/EUR 0.6800 , 0.0001 , 0.01%
• AUD/GBP 0.5262 , 0 , 0.00%
• AUD/NZD 1.1241 , -0.0011 , -0.10%

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