Aussie Takes Hit as RBA Meeting Looms

The Australian and New Zealand dollars took a hit on Monday as traders shifted their focus to Tuesday's Reserve Bank of Australia meeting.

Economists surveyed by Reuters expect the RBA to keep its cash rate at 4.35%, but the tone of the statement could still impact currencies.

The Aussie has been rallying for weeks, driven in part by a softer US dollar following the weaker US jobs report and reduced expectations for near-term US rate increases.

National Australia Bank says markets see virtually no chance of an August hike, but price a 58% chance of another move later this year.

If the RBA sounds more hawkish than expected, traders could quickly push up expectations for short-term Australian interest rates, which typically supports the Aussie.