Several currency strategists are now saying the Australian dollar's recent rally is coming to an end. The Aussie has gained 8.9% vs. the greenback this year, and has soared 44 percent over the past five years, on demand from China for the country's coal, iron ore, and nickel.

The Aussie $ has benefited from 12 increases from the Reserve Bank of Australia since April 2002 to curb inflation. Many of the currency strategists are now predicting a slide for the Aussie dollar this year, with Lehman predicting a drop to 85 cents as commodity prices fall and losses linked to subprime mortgage defaults slow global growth. But who can trust anything coming out of Lehman right now? I tend to agree with some of the Japanese analysts who continue to expect the currency to close the year at parity. Here is why I think the Aussie $ will continue to trade up: 1. As reported last week, consumer prices climbed 4.5% from a year earlier, the most since 2001. 2. Commodity prices will remain high, on Asian demand. These two factors should keep investors moving into the Aussie dollar, and the currency should hit parity by year end.

I would expect the U.S. dollar to continue to trend off today, as we won't get any data releases to start the week. Tomorrow we will see more negative data on the U.S. housing market as the S&P/Case-Shiller index is predicted to show another dramatic fall. Consumer confidence will also be released tomorrow. On Wednesday, we have a light data day with just the MBA mortgage applications released. Thursday will close out July with a major day of data including the quarterly GDP data, Personal Consumption, and the weekly jobless claims. And Friday will be another big day as we get U.S. nonfarm payrolls and unemployment rate in the U.S. for the month of July along with the ISM manufacturing data and U.S. vehicle sales.

I think the upcoming data pose downside risks to the dollar for this week. Given the state of the U.S. housing market, even the dollar bulls just can't be optimistic on the U.S. economy. The data released this week will likely make it all but impossible for the Fed to raise rates anytime soon. While the GDP data could end up surprising the markets on the upside, any gains after Thursday's report are likely to prove temporary as Friday's data will reverse any of these gains.

Should be an interesting week! Now on to the big finish:

That's it for today... Some pretty bad storms rolled through last night, with lightning and thunder keeping my kids up most of the night. The heat has returned to St. Louis, with the temps expected to be in the mid-90s most of the week. I'm going to really miss the mid-70-degree weather I enjoyed up in Manitoba last week. But now it's time to get back to work to try and pay for that trip! I hope everyone has a great start to their work week and a Marvelous Monday.