The Australian dollar was the main mover on major currency markets on Tuesday, falling more than half a percent on the back of a slide in prices of iron ore, one of the country's biggest exports.
Other majors were back in tight ranges, although some players said the euro was again looking shaky after two weeks of hints of more monetary easing by the European Central Bank which have shaken bets the single currency would top $1.40.
The Aussie has recovered solidly from lows reached in late January but worries over the pace of growth in China continue to weigh broadly on its outlook and Reserve Bank deputy governor Guy Debelle said potentially slower capital inflows to Australia pointed to more weakness.
More broadly, some currency analysts have seen signs in the past few sessions of a shift by investors toward more conservative plays, moving out of those currencies like the euro and Aussie which investors have used to gain extra yield in recent months.
He pointed to a number of catalysts overnight for the Aussie's slide to just below 93, including Debelle's comments and the concerns over iron ore receipts. The mineral dropped to a 2-1/2-year low of $98.50 a tonne for the first time in more than two years, having been at $135 in January.
There had been hopes on Monday of a breakout higher for the after it pushed through perceived important resistance against the dollar around 101.20 yen per dollar. But price action on the Japanese currency, the and sterling - the latter after a jump in response to slightly higher than expected inflation - all calmed in morning trade in Europe.
The dollar traded at 101 , its lowest level since early February. Against the , it gained less than 0.1 percent.
The euro could face some pressure ahead of potentially destabilizing European Parliament elections later this week, where votes for anti-austerity, eurosceptic parties look set to increase.
Yields on Italian and Spanish government bonds rose on Monday, as investors, concerned that a rise in eurosceptic support could thwart reform efforts, took profits on recent price gains.
Yields were slightly lower on Tuesday but any broader slackening off of interest in the periphery would be a bearish sign for the euro.
The jury is out on the fate of the single currency ahead of next month's European Central Bank meeting. Markets now firmly expect a cut in interest rates, but it remains to be seen whether that will be enough to counter the picture of positive capital flows that have kept the euro surprising on the upside against the dollar this year.
Much will depend on what other kinds of action, if any, the ECB takes or hints at. In that light there are several more speeches due from bank officials on Tuesday.
The BOJ is widely expected to keep its policy unchanged at a two-day policy meeting starting on Tuesday, with the market's attention focused instead on Governor Haruhiko Kuroda's news conference.
Kuroda has stuck to an upbeat assessment on the Japanese economy in recent weeks, dousing immediate easing expectations.