On Monday, the Aussie tumbled below US79¢ for the first time in more than 5½ years on continued international selling linked to low metal prices, quantitative easing in the eurozone, the Greek election result and expectations of a soft local inflation figure for the December quarter, to be published on Wednesday. Overnight, the Australian dollar steadied, and is fetching 79.19 US cents at 7:00am AEDT.

Economists are expecting low oil prices to have fed through to consumer prices during the final three months of last year, with some pundits expecting headline inflation to have slipped below the Reserve Bank of Australia's 2 to 3 per cent target band, from 2.3 per cent at the end of the September quarter.

The prospect of softer inflation, together with the Bank of Canada's surprise decision to lower interest rates last week and the European Central Bank's bond-purchasing program, have raised the odds of looser monetary policy in Australia.

Traders now see a 30 per cent chance that the RBA will lower rates when the board returns from its summer break for its first meeting of calendar 2015 on Tuesday next week.

According to National Australia Bank, a cumulative rate cut this year of close to 0.5 per cent has been priced in by the market.

"I think people are still keen to be short the Aussie running into the CPI this week on expectations that [the data] will continue to fuel speculation that RBA rate cuts are on the way," said Bank of New Zealand currency strategist Raiko Shareef.

"The Aussie will struggle to get bid ahead of the RBA meeting next week," he said. However, if the RBA didn't change its language on inflation and the interest rate outlook, the local unit could be subject to "a pretty sharp rally above US80¢", Mr Shareef added.

The US Fed's first monetary policy statement for the year, early on Thursday AEST, will also be closely watched for any signs that lower energy prices and European QE is weighing on central bank thinking about the start of monetary tightening.

Any heightened concerns of the impact of slowing global growth on the US economy could sap energy from the greenback rally as the chances diminish of an imminent interest rate rise in the US. Some economists also believe the windfall gains from cheaper energy prices will eventually do the work of monetary easing, by encouraging consumption and investment.

"In the current environment, with positive consumer sentiment, cheaper energy costs may yield spending growth," said Alliance Bernstein's chief market strategist and co-head for multi-asset solutions, Vadim Zlotnikov.

"This is the primary mechanism for much of the developed world, so we view lower oil prices as a positive, with the effect on developed economies magnified by favourable – or even simply improving – consumer sentiment."

Victory by the left-wing Syriza party in Greece at the weekend will also re-stoke speculation around the country's possible debt default and exit from the euro system. However, consensus is forming around a settlement with its creditors by mid-year, when a key payment is due, and this will guarantee its survival in the eurozone. With Syriza expected to fall short of an absolute majority, any coalition partner is likely to temper the party's more extreme demands around debt write-offs and more generous terms.

"We still think Greece will stay within the eurozone," said Royal Bank of Canada Capital Markets in a note on Monday.