$A surges nearly US1¢

The Australian dollar opened nearly one US cent higher on Tuesday as weaker-than-expected US economic figures underpinned the gains.

However, the local unit's moves are expected to be capped by a slew of data releases this week.

At 7am (AEDT), the local unit was trading at US74.30¢, compared with Monday's close of US73.40¢.

Overnight, it reached a low of US73.23¢ and a high of US74.53¢.

Westpac Bank senior currency strategist Richard Franulovich said the weaker-than-expected US home sales figures boosted the Australian dollar.

"This initially kicked things off, and it was enough to lift the euro off the lows but everything since then has been a stop run," he said.

"You really needed a seatbelt today, it has been pretty wild."

Mr Franulovich said many investors had be taken aback by the large moves last night.

"A lot of people had been caught short, on the short euro – long dollars, and they have been squeezed today so they are squaring up trying to get a handle on the price action," he said.

Mr Franulovich said despite the Australian dollar's big moves, the week ahead presented a heavy run of data releases in both Australia and the US, which were likely to weight on local unit trade.

"Numbers like Australian retail sales and the current account (deficit) are likely to be a touch weaker than consensus, while in contrast, the US durable goods numbers, consumer confidence and even payrolls will be a touch better than consensus," Mr Franulovich said.

"So I think the risks all around to these numbers argue for this squeeze being unsustainable."

The Australian Bureau of Statistics releases its October retail trade data on Wednesday and September quarter current account figures on Thursday.

Meanwhile in the US, the Institute of Supply Management's November manufacturing index is expected to give the US dollar some direction, as are the all-important US non-farm payrolls numbers on Friday.