Australian dollar made little progress on Monday, after hitting a 9-week low offshore, as investors brace for a shrinking of the currency's yield advantage on September 21.
US employment data on Friday cemented expectations the Federal Reserve will lift US rates to 1.75 percent at this month's meeting - cutting the Aussie's premium to 350 basis points. It had boasted a 425-point advantage earlier this year.
"Shorting Aussie against the Swiss franc and Canadian dollar still look like solid bets," said David Mozina, currency strategist at ABN Amro.
He noted data on Friday showed Australian retail sales unexpectedly fell 1.0 percent, against expectations for a rise, and said the Aussie could fall to 65 US cents within three months.
The Aussie was at $0.6914/19, compared with $0.6970/75 late on Friday. The currency fell to $0.6890 offshore, down 5 percent from its August peak of $0.7263.
"If interest rates are going to move in any direction after the election it is up. It hardly makes sense that interest rate settings remain modestly stimulatory at a time when the labour market is clearly tightening," said Craig James, economist at Commonwealth Securities.