Australian and New Zealand dollars struggled on Monday

The risk-off currencies fell against the safe-havens on Monday. The Australian dollar declined against the U.S. currency and the Japanese yen during the morning trade. However, it climbed up about 0.2% higher against both later. The Aussie last traded at $0.6844 and 73.18 yen.

Meanwhile, the New Zealand dollar stayed strong slightly stronger, trading at $0.6418 US. Still, both currencies have lost the momentum they had in early June due to new tensions on markets.

The Reserve Bank of New Zealand will announce its latest benchmark interest rate settings on Wednesday. Analysts are sure that the bank will keep rates on hold at 0.25%. However, that leaves FX markets to focus on talks of negative rates in the future.

On Sunday, the World Health Organization announced a record increase in global cases. As a result, the U.S. dollar reached a three-week high, rising to 97.744. The greenback held on to small gains from last week against a basket of currencies as well, but it fell back to flat at the end of the session.

Moves were modest on the markets as traders turned to safe-havens due to renewed concerns about the second wave of coronavirus infections and possible lockdowns. While the greenback dropped slightly versus the Australian and New Zealand dollars, it was steady against the euro, yuan, and British pound.

What about the Japanese Yen?

The yen rallied due to its safe-haven status. It was firm at 106.92 per dollar, near to a one-month high of 106.58. Analysts at Barclays noted that FX markets would probably remain caught between recovering economic indicators and concerns about a second-wave of coronavirus infections in the coming week. They also expect continued pressure on the New Zealand dollar.

The euro may gain if the Purchasing Managers Index (PMI) data beats expectations due on Tuesday. The currency last traded flat at $1.1176 after tumbling down to a three-week low of $1.1168 in early trade.

The British pound is under pressure due to Brexit worries as well. The British currency traded just above a three-week low at $1.2363.