The Australian dollar inched up from six-week lows on Monday helped by a rally in prices for iron ore, the country's top export earner, while its New Zealand cousin consolidated after sharp losses recently. The Australian dollar added 0.2 percent to $0.7100, bouncing from Friday's $0.70605 - a level not seen since January 4.
The currency stumbled 2.2 percent last week for its worst weekly showing since early October, as traders narrowed the odds on future rate cuts after the country's central bank changed its tune on policy.
"One factor that may have contributed to the small AUD recovery can be attributed to the soaring iron ore price," said Rodrigo Catril, senior forex strategist at National Australia Bank.
The New Zealand dollar was last up 0.2 percent at $0.6765 after three straight sessions of losses took it to a nearly three-week trough of $0.6730.
The losses began on Thursday when employment data disappointed, stirring speculation the Reserve Bank of New Zealand (RBNZ) might sound more amenable to a rate cut at its policy meeting on February 13.
The prospect of future rate cuts in Australia and New Zealand sent bonds in both countries rallying last week.
They came off their highs on Monday, with yields on New Zealand government bonds up 1-2.5 basis points across the curve.
Australian government bond futures were mixed, with the three-year bond contract off 4 ticks to 98.360. The 10-year contract was flat at 97.900.
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