The Aussie gained after the release of central bank minutes from the December meeting and an expected reading in the house price index.
The minutes of the Reserve Bank of Australia’s December meeting noted there was still scope to ease further from a record low 2.0% with inflation levels offering room.
Also in Australia, the house price index for the third quarter rose 2.0% as expected.
New Zealand updated fiscal figures, showing a forecast budget deficit of NZ$5.4 billion for the year ended June 30, 2016, up from NZ$4.17 billion a year earlier, with net debt forecast at 26.9% of GDP, up from 26.30%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.02% to 97.72.
Overnight, the dollar erased gains against the other major currencies on Monday, as sentiment on the greenback became fragile ahead of the Federal Reserve’s highly-anticipated policy meeting this week.
Most investors expect the Fed to raise interest rates for the first time since June 2006 at its upcoming meeting on December 15-16.
Higher interest rates would make the U.S. dollar more attractive to yield-seeking investors.
Data earlier showed that eurozone industrial production rose 0.6% in October, beating expectations for a 0.3% gain, after a 0.3% fall the previous month.
As well on Monday, China’s yuan opened at fresh four-and-a-half-year lows after the People’s Bank of China set its yuan midpoint rate at the lowest level since 2011.
The move came after the PBOC indicated Friday that it may ease its loose peg to the dollar and allow the yuan to track a broad basket of currencies of China’s trading partners. Such a move would reduce China’s demand for dollars.