April's flash reading for US GDP, annualised, was 0.2 per cent growth. However, revised data to be released on Friday in the US is expected to show the economy contracted between 0.6 and 0.9 per cent, annualised, in the March quarter.

Such a reading will make it very hard for the US Federal Reserve to lift interest rates in coming months.  That will put downward pressure on the US dollar and upward pressure on the Aussie.

Despite that, Westpac currency analyst Rob Rennie said the Aussie would not return to mid-May's high of US81.53¢.

"The Australian dollar is likely to remain in a US78.50¢ to US80¢ trading range through next week, but Westpac continues to forecast further weakness in the currency as the year progresses.

"We expect to see the Australian dollar trading down around US73¢ by year's end."

Mr Rennie said he expected the US GDP figure later this week to show a 0.9 per cent contraction.

The Australian dollar was trading just above US78.15¢ in mid-day trade Monday. A 0.25 US cent plunge and bounce around 8am was blamed on technical repositioning. "There's no significant news that come out so I would assume its...Monday morning traders and portfolios adjusting their positions," said ThinkForex markets analyst Matt Simpson.

The Australian dollar dived 0.60 US cents on Friday night as US inflation came in at 1.8 per cent instead of 1.7 per cent and as US Federal Reserve chair Janet Yellen indicated a rate rise sometime this year was still on the cards.

Meanwhile, moves by some Australian banks to curb investment bank lending may keep a lid on housing prices - therefore encouraging the Reserve Bank to further lower rates and put added downward pressure on the Aussie.

ANZ said last week it will stop giving discounts on mortgage rates to investors, while NAB also said it would respond to calls from regulators and limit such offers.

James McIntyre, head of Australian economics at Macquarie Group, said the move "could assist, or give the Reserve Bank that flexibility needed" to lower rates.

But ANZ currency analyst Daniel Bean said house prices made little difference to the Reserve Bank's rate-cut policy. "They have demonstrated that despite what's going on in housing, if the broader economy is suggesting further easing is needed, they will provide further accommodation."