The first day of the week has not been well for the Australian currency because it traded lower from its three-week high. The Australian dollar and NZ currency faltered as speculations of economic recovery again spooked the market.

Both currencies were last week's biggest gainers among their 16 most-traded peers against the greenback.

"There's still too much concern over slowing global growth to want to get too bullish on the Aussie," said Greg Gibbs, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in Sydney told Bloomberg. "The Aussie has had a good week last week and the market wants to see some further good news to keep driving it."

Interest Rates

Central Bank Governor Alan Bollard is expected to keep annual inflation between 1 percent and 3 percent on average over the medium term.

According to a technical analyses based on the Credit Suisse AG index, swaps traders are betting the Reserve Bank of New Zealand will increase its official cash rate by 1.30 percentage points over the next year.

Benchmark interest rates are 4.5 percent in Australia and 2.75 percent in New Zealand, attracting investors to the South Pacific nations' higher-yielding assets. However, this opens up the risk in such trades as currency market moves tend to erase profits.