After briefly falling below parity with the US dollar on the weekend, pressure will once again be on the Australian dollar this week with a number of indicators of the health of the US economy due to be released.
The Australian dollar fell to a low of US99.61¢ during the New York session, before a late gain pushed it back above parity to close the session at US100.25¢. Earlier Friday it had traded at as much as US100.8¢.
The move in the dollar came about on a broader surge in the US dollar as commodities retreated, extending the biggest two-day rally in the US dollar in nearly a year.
The dip below parity caps off a wild week for the Australian dollar, which started trading Monday at US103.15¢.
The Reserve Bank of Australia cut official cash rates to a low of 2.75 per cent partly to take some of the heat out of the high dollar.
Even so, the currency began an upward surge on Thursday, after official figures showed jobs growth was running faster than expected.
While the dollar last broke parity in June, the Australian dollar has mostly traded above US100¢ since early 2011, putting the squeeze on export-oriented industries.
AMP Capital head of investment strategy Shane Oliver said the Australian dollar has "decisively broken down" the range in trading of US102¢ to US106¢ since July 2012.
"A lower Australian dollar is just what Australia needs right now," Dr Oliver said.
The latest moves are largely driven by renewed strength in the US dollar amid signs of confidence in the strength of the world's largest economy.
This has led to speculation over when the US Federal Reserve Bank will start to wind-down its massive $US85 billion-a-month bond buying program, a move that is likely to see the US dollar push higher.
"Further losses are possible in the Australian dollar after the Reserve Bank cut its inflation outlook," said managing director of currency exchange strategy at BK Asset Management Kathy Lien.
However, some US economic data releases, including retail sales, industrial production and inflation, may challenge the US dollar rally.
"We forecast a 0.7 per cent drop in headline retail sales, below the 0.3 per cent [fall] consensus," said BNP Paribas strategist Vassili Serebriakov.
"Later in the week, we expect a 0.4 per cent contraction in industrial production, and a second monthly consecutive drop in headline CPI."
This week, the US dollar traded above 101 Japanese yen, jumping 3.6 per cent while it performed strongly against all major currencies last week.