"Its a big move and I think any bounce should be sold into," said Graham Davidson, a spot trader with National Australia Bank in London.
"Generally when the RBA move, they tend to cut a handful of times. The feeling is of an economy where there is no source of growth, almost of despair."
Interest will now swing to a speech by New Zealand central bank chief Graeme Wheeler on Wednesday.
"The only currency I would buy the Aussie against is the kiwi," Davidson said. "The RBNZ has been hiking but I think they will have to backtrack on that and Wheeler may take a softer tone tonight."
Against the yen, the Aussie was down 2.5 percent at 89.43 yen, dropping below support at 90 yen for the first time since February 2014.
Read MoreCharts: Australian dollar faces test of key support
While the euro was steady against the dollar at $1.1350, the yen continued a recent run, rising 0.3 percent against the dollar to 117.21. The euro, too, was down 0.25 percent against the yen at 133 yen.
Awaiting the European Central Bank's launch of bond-buying in March, German 10-year government bond yields fell below the Japanese equivalent and a number of dealers said they saw value in the yen currently.
"There is a feeling that the Japanese could stay on hold on any further monetary easing,'' said one dealer. "That is helping it and in general we had come a long long way and much attention has switched to the euro."