THE Australian dollar is lower following the onset of automatic spending cuts in the US and disappointing economic data in Europe.
At 0700 AEDT on Monday, the currency was trading at 101.97 US cents, down from 102.36 US cents on Friday.
US President Barack Obama on Friday reluctantly ordered an $US85 billion ($A83.67 billion) austerity drive after failing to reach an agreement with Republicans to prevent the automatic spending cuts.
Congress still has about a month to intervene and stop the cuts, which take effect from early April, but news Republicans and Democrats had been unable to reach an agreement by March 1 strengthened the US dollar, a safe haven asset, against all major currencies.
HiFX senior trader Stuart Ive said the Australian dollar also suffered due to poor economic data out of Europe, including weak manufacturing figures in France and Italy.
"The thing that is really holding it back in Europe, everything is looking pretty dire over there at the moment," he said.
"Certainly, for the time being it seems that the uncertainty in Europe is weighing heavily on the Aussie dollar."
Mr Ive said it would be a busy week for global markets, with central bank meetings in Europe and the UK, the release of key monthly employment figures in the US and inflation figures in China.
Meanwhile, the Reserve Bank of Australia will decide whether or not to cut the cash rate, currently at 3.0 per cent, on Tuesday, while the Australian Bureau of Statistics will release gross domestic product figures for the December quarter on Wednesday.
"There's a lot going on and that's probably going to leave the majority of the market sitting on the fence for the time being," he said.
Mr Ive said the Australian dollar was likely to trade between 101.80 and 102.60 US cents on Monday.
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