At 7am (AEDT), the Aussie dollar was trading at US75.02¢ slightly below Friday's close of US75.19¢. And since Friday, it hit a low of US74.90¢ and a high of US75.45¢. Aussie dollar continues to trade within a tight range.

The US dollar fell in value as a result of a much weaker Gross Domestic Product (GDP) expansion rate of 1.1% annual rate as investors expected more. And so the US dollar was sold off. The the next figures to be received by the market was better than expected Personal Consumption Expenditures (PCE) component.

US dollar recovered as a surprise rise in new home sales in December 2005 saw an increase of 2.9% to 1.269 million new homes.

The indicator to watch this week is the US Federal Open Market Committee (FOMC) statement on interest rates to be released this Wednesday morning. The market is expecting an increase of 25 points taking the cash rate to 4.50%. What the statement says about any future rate hikes will be critical. It will be the last FOMC meeting attended by outgoing US Fed Chairman Alan Greenspan.

Another indicator to watch this week is the retail sales due out on Friday.