Aussies will be packing their bags for a trip to the UK, with the dollar tipped to strengthen against the British pound this week on the back of a disastrous election result for British Prime MinisterTheresa May.
AMP Capital's chief economist Shane Oliver says the dollar will likely remain strong against the UK pound and he predicts the local market to lift 21 points when it reopens on Tuesday.
"My feeling will be that we are probably on track for a rise in the market on Tuesday when it reopens," Dr Oliver told AAP on Sunday.
"There is no economic data that will sway markets on Monday so that could leave in place the likelihood of a gain."
The Australian share market ended slightly higher on Friday, lifted by mining stocks while the poor showing for the ruling Conservative Party in the UK election gave the Aussie dollar a 2.5 per cent lift on the British pound over the week.
Both the ASX 200 and the broader All Ordinaries index were relatively flat between 0.01 and 0.02 per cent, finishing Friday's trade at 5677.8 points and 5715.5 points respectively. The local market will be closed on Monday for the public holiday.
Internationally, eyes will be on the US Federal Reserve meeting on Wednesday, with interest rates expected to rise for the fourth time since December 2016.
"It is not going to be a surprise to the market," Dr Oliver said adding there is a 95 per cent probability of a hike.
He said investors will be listening out for the Federal Reserves' outlook which will likely argue the US economy is continuing to improve on the back of rising rates.
At home, the Australian Bureau of Statistics employment figures will be the week's highlight with 10,000 new jobs expected to be announced.
"That is a bit of a slow down after some very strong job numbers in the previous two months," Dr Oliver said, predicting a 5.7 per cent unemployment rate.
"These numbers can be a bit of a lottery in which way they go."
While there is a risk of dipping into negative numbers recent business surveys, employment plans and the ANZ job advertisement figures are pointing to fairly solid job growth, according to Dr Oliver.
"Even though there is a bit of a risk given the volatility in this data, we would be dangerous to read too much into it."
He said the underemployment figure, expected to remain at roughly nine per cent, will draw interest given recent economic data has been on the "soft side".
"The problem in Australia has not been overall employment numbers, it is has been under employment numbers - people getting part-time jobs when they want full-time jobs," he said.
"The figures are going to be looked at quite closely."
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