The New Zealand dollar bounced from a four-month low, though faces more downside pressure with local employment figures and Australian consumer spending data later in the week.
The kiwi rose to 81.16 US cents at 5pm in Wellington from 80.73 cents at 8am, and 80.85 cents on Friday in New York. It fell as low as 80.61 cents last Friday, the lowest since Sept. 11. The trade-weighted index was little changed at 77.09 from 77.20 at the New York close.
Investors' appetite for the kiwi has dimmed since the Reserve Bank kept the official cash rate at 2.5 percent last week, disappointing some traders who'd been betting on a rise, and as concerns about emerging markets encouraged a return to safe-haven assets. Chinese manufacturing figures showed the weakest reading in six months.
Governor Graeme Wheeler last week said the bank will be monitoring the economic data as he prepares to hikes interest rates, and employment figures on Wednesday could change the market view as it's a notoriously volatile data series. Australian retail sales on Thursday could also break the kiwi out of its recent range, with the local market closed for the Waitangi Day holiday and reducing liquidity.
"The kiwi's still in the zone, just hanging on to the range since September," said Alex Hill, head of dealing at HiFX in Auckland. "It looks like more downside is not that far away."
Traders will keep an eye on US manufacturing figures as they gauge the strength of the world's biggest economy, ahead of employment figures at the end of the week.
The local currency rose to 92.70 Australian cents at 5pm in Wellington from 92.32 cents on Friday in New York ahead of tomorrow's Reserve Bank of Australia policy meeting. Australia's central bank is expected to keep the cash rate at 2.5 percent, while removing an easing bias after stronger than expected inflation figures last month.
The kiwi rose to 83.06 yen from 82.49 yen last week, and advanced to 60.18 euro cents from 59.94 cents. It increased to 49.40 British pence from 49.18 pence on Friday.