The Australian dollar is slightly lower, in a week of quiet trade with Asian markets closed due to the Lunar New Year public holidays.
At 0700 AEDT on Tuesday, the local unit was trading at 102.84 US cents, down from 103.01 cents on Monday.
Westpac New Zealand senior market strategist Imre Speizer said there is very little to drive currency markets this week.
He said that in the absence of other news, the likelihood of another central bank cash rate cut in Australia was weighing on the currency.
Meanwhile, the Reserve Bank of New Zealand's next move is likely to be an interest rate rise which is giving support to the New Zealand dollar, colloquially known as the kiwi.
In early morning trade, the Australian dollar fell to 122.80 New Zealand cents, its lowest level since July 2010.
"So, the cross trading remains strong so traders continue to sell Aussie and buy kiwi, so that is putting pressure on the Aussie as well," Mr Speizer said from Auckland.
"We saw that last night where the kiwi had a big surge and Aussie only had a small bounce and the cross rate fell quite sharply."
Mr Speizer said the main focus for currency markets this week would be the Group of 20 (G20) meeting on Thursday and Friday in Moscow.
He said the Australian dollar could surge towards 103.50 US cents in local trade on Tuesday.