At 1200 AEDT on Monday, the currency was trading at 71.71 US cents, down from 72.44 cents on Friday.

OANDA Australia and Asia Pacific senior trader Stephen Innes said continued oil price falls are sending commodity currencies like the Aussie into a tailspin.

“With the US Federal Reserve coming into traders’ crosshairs we should be in for rather bumpy rides as commodity and interest rates continue to drive sentiment this week,” he said.

The Fed is widely expected to hike rates for the first time in nearly a decade when it meets on Thursday (AEDT).

“Currently the market is positioning for a gradual lift off but we will soon find out (if Fed Chair) Janet Yellen’s post-meeting press conference reveals anything more aggressive,” Innes said.

– AAP