SYDNEY: The Australian and New Zealand dollars fell on Monday as stricter Christmas lockdowns to contain coronavirus outbreaks around the world drove investors to buy the save haven greenback.

The Aussie dropped 0.49% to $0.7585 having climbed for seven straight weeks to touch $0.7639 on Dec. 17, the highest since June 2018.

The kiwi eased at $0.7079, down 0.59% on Monday afternoon day after reaching $0.7170 last week, its highest since April 2018.

Several European countries closed their borders to the UK as the country entered a tougher lockdown on the weekend to fight a new strain of coronavirus, driving the US dollar higher against major peers on Monday.

"The markets were happy to continue plodding along higher into year end in the absence of any material bad news, but I would argue that this is pretty bad news that the markets had not been anticipating," said Chris Weston, a strategist at Melbourne broker Pepperstone.

Britain also said the European Union must shift position after Brexit negotiators failed to find agreement, raising the risk that the UK leaves the trading bloc with no deal at the turn of the year, fuelling the market's negative sentiment.

In Australia, a new coronavirus outbreak the northern beaches of Sydney involving 83 confirmed cases in the past week triggered multiple inter-state border closures.

"The AUD was also been pressured by growing concern about the Sydney outbreak but I think this is less important than the global, UK-inspired sell-off," said Steven Dooley, APAC currency strategist at Western Union Business Solutions.

Australian yields fell, with 10-year bonds last trading at 0.969%, after closing at 0.99% on Friday.

Australian government bond futures were higher, with the three-year bond contract one and a half ticks higher at 99.80 and the 10-year contract up two ticks to 98.98.

New Zealand government bonds were slightly higher, sending yields about one basis points lower across the curve.