The Aussie at $1.0223 vs $1.0237 late in New York. It surged over 2 pct to as high as $1.0260 on Friday as markets cheered surprise progress in Europe's effort to resolve its debt crisis.
Strong resistance seen around $1.0250/60, a level which has previously provided good support for the currency back in April.
Little reaction to private report showing benign Australian price pressure in June, ahead of government's quarterly report later in the month. Confirmation of benign inflation offers scope for the Reserve Bank of Australia (RBA) to cut rates again if needed.
For tomorrow's RBA policy meeting, analysts and markets alike expect no rate move following back-to-back cuts.
Interbank futures giving a mere 12 pct chance of a quarter point cut, although markets are still priced for around 75 bps worth of easing over next 12 months.
Markets now turning to economic data for fresh impetus. China official PMI on Sunday was not as bad as feared, but still confirmed factory activity in Australia's biggest trading partner has slowed to seven-month lows. Surveys from Europe and the United States due later in the day.
Kiwi trades at $0.8010, little changed on the day and pulling back from Friday's $0.8042 -- highest since May 3. Analysts see chance of a rise to $0.8100 in the near term if the global shares continue to gain.
Initial upside seen at $0.8023, its 100-day moving average, after the currency failed to post a daily close above that resistance level late last week. Near-term support at $0.7847, its 200-DMA, where market participants see demand to buy on dips.
Investors offer little reaction to an ongoing deterioration in New Zealand job confidence, with the Westpac-McDermott Miller employee confidence index falling to a three-year low of 96.2 in the second quarter.
NZ government bonds fall across the board, sending yields up to 14.5 basis point higher at the long end of the curve.
Australian government bond futures also under pressure, with the three-year contract down 0.09 points at 97.520 and the 10-year 0.075 points lower at 96.895.