The Aussie fell as more than a year since the last time the Reserve Bank of Australia cut interest rates. That could change when the central bank wraps up its May policy meeting Tuesday afternoon in Sydney. Last week, a quarterly measure of inflation came in well below expectations, stoking a massive run-up in expectations for a hike at Tuesday's meeting.

Regardless of the central bank's decision, it is likely we'll see a strong reaction in the currency. But if the bank follows through with a cut, a sharp selloff could materialize, market strategists said.

The Aussie is widely viewed as a proxy for investors' economic views on China. The currency often reacts strongly to Chinese economic data. But the shifts in investors' expectations for a possible cut are more firmly rooted in the domestic economic outlook. Namely, a recent report on Australian inflation which came in unexpectedly weak.

EUR/USD: during the Asian session the pair traded in the range of $1.1520-40

GBP/USD: during the Asian session the pair traded in the range of $1.4660-85

USD/JPY: during the Asian session the pair fell to Y106.00

Based on Reuters materials