The Australian dollar extended losses on Monday, weighed by weak Asian bourses and a broadly stronger US dollar, as investors turned their focus back to Europe's lingering fiscal issues ahead of Australia's rate decision. The Aussie nudged lower to $1.0710 in thin trading, from $1.0733 in New York on Friday. It dipped to a session low of $1.0704, just above key support around $1.0695, the 61.8 Fibonacci retracement of the $1.0597-$1.0857 move.
The Aussie has been pulling away from Wednesday's seven-month high of $1.0857, but dealers remained optimistic. The Australian dollar dropped half a yen in the session to 87.33, well off a 10-month high of 88.00 yen on Friday. As well, the kiwi fell 0.7 percent on the yen to 67.51, retreating from a peak of 68.28 last week, its highest since August.
The New Zealand dollar shed 0.2 percent to $0.8274, having plumbed one-week lows at $0.8270. "In the medium term, we see "risk-on" with the Aussie heading past $1.0800," said a dealer at a foreign bank. "There is a lot happening this week and lots of people are sitting on the sidelines at the moment," she added.