SYDNEY/WELLINGTON: The Australian and New Zealand dollars struggled to make headway on Monday against their US counterpart and held gains versus the euro with a holiday in Britain and the United States likely to keep investors on the sidelines.
The Aussie was steady at $0.9233, from $0.9214 on Friday, having formed a base just above 92 US cents after a recent selloff.
It shed 1.4 percent last week, its largest decline since January, mostly on positioning.
Dealers said investors tend to use any excuse to sell, such as falling prices of iron ore, Australia's top export earner.
The mineral slumped to its lowest in more than a year at $97.50 a tonne.
Yet, Joseph Capurso, a strategist at Commonwealth Bank of Australia, sees a potential bounce for the Aussie above 93 cents on the back of local data.
Australian business investment figures are due on Thursday with forecasts of a fall of 1.4 percent for the first quarter against Capurso's expectations of a solid reading.
Support for the Aussie was seen around $0.9200, with resistance near $0.9250.
The Aussie held recent gains against the euro, which was last at A$1.4743, from A$1.4807 Friday.
The common currency has lost 11 cents since early May amid mounting expectations that the European Central Bank will ease policy next month.
The New Zealand dollar was sitting close to a four-week low at $0.8531, as the firmer US dollar and scaling back of rate expectations at home weighed on the currency.
"Markets expect the RBNZ to downgrade its official cash rate track and we expect that sentiment to endure at least until the 12 June monetary policy statement meeting," said Westpac senior strategist Imre Speizer.
"A break below $0.8525 would signal a further fall to the $0.8300-0.8400 area." The Reserve Bank of New Zealand is expected to raise its cash rate by a further 25 basis points to 3.25 percent at the June meeting but is seen as likely to signal it will not be as aggressive in the future in tightening rates.
The strength of the currency and relatively tame inflation pressures are seen as reasons to delay one of the rate rises signalled in the RBNZ's March forecasts, although it needs to balance those factors against the stimulus from strong migration gains.
Near-term support for the kiwi is seen $0.8517, the 23.6 percent retracement of the kiwi's August-May rally, with the next support seen at $0.8501, with $0.8580 capping the topside.
Local data showed a smaller trade surplus in April, although the annual surplus picked up.
The calendar also has building consents and business confidence data this week.
New Zealand government bonds had a slight bid tone, pushing yields 1.5 basis points lower along the curve. Australian government bond futures had a firm tone but were still a fair way off nine-month peaks touched last week.
The three-year bond contract was up one tick at 97.190, while the 10-year contract added 2 ticks to 96.245, having risen as far as 96.375.
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