The Australian dollar traded a tiny range on Monday despite further data building the case for higher local interest rates. Credit growth was stronger than expected in December, while a private survey showed inflation surged in January. "Rising underlying inflation together with the whiff of a recovery in household credit growth could see the RBA Board act on its tightening bias sooner, rather then later," said ANZ economist Katie Dean.

The AUD was $0.7740/48, compared with $0.7751/56 late here on Friday, consolidating after being rebuffed at a three-week high of 78 US cents last week.

The Aussie came close to testing 77 cents offshore, but managed a modest bounce after fourth-quarter US gross domestic product on Friday failed to live up to expectations, causing some slippage in the US dollar.

The US dollar edged up in Asian trading after the Iraqi election passed without a major hitch, although it still faced several key pieces of data this week and a two-day Federal Reserve meeting starting on Tuesday that is expected to lift the funds rate by 25 basis points to 2.5 percent.

Copyright Reuters, 2005