The New Zealand dollar weakened against the Australian dollar ahead of reports on Tuesday which may show the Australian economy is picking up pace.
The kiwi slipped to 92.31 Australian cents at 8am in Wellington from 92.54 cents on Monday. The local currency was little changed at 82.62 US cents from 82.75 cents as investors await the inaugural testimony of new Federal Reserve chairman Janet Yellen.
Australia's central bank this month changed its easing bias to neutral, signalling an end to rate cuts this cycle, following upbeat inflation and business confidence reports.
Investors will be looking to Australian reports on home loans, house prices and business confidence for the latest gauge on Australian economic activity.
"Today, the key for the AUD will be the release of the NAB business survey," said Kymberly Martin, markets strategist at Bank of New Zealand.
Speculative traders are heavily short the Australian dollar, meaning they bet the currency will fall, so a solid business survey is the biggest risk for the cross rate, Ms Martin said.
Analysts are keen to hear Ms Yellen's policy and economic views and expect she is likely to continue the Fed's plan to taper its $US65 billion a month quantitative easing programme by $US10 billion a month.
The New Zealand dollar fell to 84.41 yen from 84.73 yen and dropped to 60.57 euro cents from 60.74 cents after a Sentix report showed Eurozone investor confidence unexpectedly improved in February to its highest in almost three years.
The local currency eased to 50.37 British pence from 50.43 pence and the trade-weighted index fell to 77.88 from 78.05.
