The Australian dollar lost over a third of a cent on Monday having been hit by a broad wave of US dollar buying following Friday's G7 meeting, but held tentatively above 72 US cents.
Local interest rate futures pared earlier falls, having been dragged lower with US Treasuries, which extended losses in Asia following Friday's data that was seen strong enough to suggest the Federal Reserve will tighten policy again in November.
Still, activity was restrained by holidays in most parts of Australia, including the main financial centre in Sydney.
The AUD was $0.7220/24 compared with $0.7261/66 late here on Friday.
An early mark-down found support close to $0.7200, but the subsequent rebound ran into sellers towards $0.7250. It touched a 10-week high of $0.7286 last week on continued strength in commodity currencies and despite recent soft data. However, ANZ Investment Bank currency strategist Craig Ferguson said that as long as $0.7180 continues to provide support, a new high is expected above $0.7280.
The big dollar had headed into the weekend cautious that the Group of Seven meeting of industrialised nations would take a firm hand with China and push it to revalue the yuan.
While the G7 communiqué did urge flexibility in exchange rates, it did not single out any country. China has said it will move to a more flexible currency at its own pace.
Still, UBS strategist Ashley Davies said commodity currencies, such as the Aussie, should benefit from key Asian currencies continuing to resist appreciation.
"Australia is a key supplier of raw materials to China and news that China is no hurry to revalue the CNY decreases uncertainty over the prospects for continued strong demand for Australian commodity exports," Davies said.