SYDNEY: The Australian dollar started the new year with gains on Monday, as investors bet on a vaccine-fuelled recovery of the country's economy, which is already supporting higher property prices, while the New Zealand dollar was also higher.

The Aussie was up 30 basis points to $0.7714 on low volumes in the Asian afternoon, recovering from some weakness earlier in the session amid reports Japan is considering a state of emergency for Tokyo because of rising COVID-19 infections.

The New Zealand dollar was fetching $0.7199, 26 basis points more than in the previous session.

Both currencies have been buoyed by rising commodity prices; iron ore, Australia's single biggest export earner, doubled in price last year to more than $160 a tonne.

The kiwi ended 2020 6.7% stronger and a staggering 31% firmer from the $0.5510 trough touched during the market volatility of mid-March. Its Australian counterpart gained 9.6% in 2020, its highest annual gain since 2010.

Australia and New Zealand have had success in containing the coronavirus, though an outbreak in Sydney threatens growth into the new year.

Data on Monday showed Australian home prices climbed for a third straight month in December, with analysts expecting more gains this year as the turnaround from the COVID-19-led crunch has provided a much-needed windfall to consumer wealth and confidence.

Australian government bond futures slipped slightly, with the three-year bond contract down half a tick at 99.825. The 10-year contract easing 3 ticks to 98.95.