The Australian sharemarket is set to open higher on Monday, clawing back roughly half the losses brought on by a fall in the US.
The benchmark S&P;/ASX200 closed 47 points lower on Friday, with miners, energy and bank stocks all dragged down by a drop on Wall Street and a rising US dollar, which drove commodity prices south.
But Australia's futures market points to a gain of 20 points at Monday's open, according to AMP Capital's chief economist Shane Oliver.
He said uncertainty over interest rates in America had cleared after US Federal Reserve chair Janet Yellen signalled a likely March rise.
"There was a bit of nervousness waiting for that announcement but, now it's happened I think we'll see things bounce back " Dr Oliver said.
"It should reverse roughly half of the falls we saw."
The Reserve Bank of Australia is holding its monthly board meeting on Tuesday and Dr Oliver is tipping interest rates to remain unchanged.
"I understand that there is an argument to cut again but [Reserve Bank governor]Â Phillip Lowe has indicated the level of household debt means they shouldn't move," he said.
"It's hard to see them doing anything else."
Dr Oliver predicts retail trade for February to rise by 0.4 per cent when the Australian Bureau of Statistics releases its monthly figures on Monday.
The Australian dollar is sitting at 76 US cents after losing more than a cent against the greenback on Friday.
Dr Oliver forecasts the local currency will continue to rise and dip across the week.
I think we'll see things bounce back.
Shane Oliver
"It will just keep bouncing and probably stay in that 75.5 to 77 area. It's stuck in a bit of a range at the moment," he said.
AAPÂ
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