A worker pushing a trolley walks with pedestrians past the Reserve Bank of Australia (RBA) head office in central Sydney
A worker pushing a trolley walks with pedestrians past the Reserve Bank of Australia (RBA) head office in central Sydney, Australia, March 7, 2017. Picture taken March 7, 2017.

The Australian and New Zealand dollars gained ground on Monday ahead of expected rate hikes from their respective central banks later in the week, while the dollar slipped against a basket of currencies.

The Aussie was up 0.19% to $0.64230, away from a 2-1/2-year low of $0.63635 hit last week, while the kiwi was 0.44% higher at $0.56280, similarly pushing away from last week's trough of $0.55645.

The Reserve Bank of Australia and the Reserve Bank of New Zealand meet on Tuesday and Wednesday, respectively, with markets expecting both to lift their cash rate by 50 basis points, though focus will also be on the tone of policymakers.

"The RBA could be quite influential if they give a more nuanced approach and signal that they may come down to 25 basis points in the November meeting. That might be taken, globally, quite well," said Chris Weston, head of research at Pepperstone.

Sterling fell 0.19% to $1.1144, but remained off its record low of $1.0327.

The pound rebounded strongly at the end of last week when the Bank of England said it would buy as much government debt as needed to restore order after new Prime Minister Liz Truss's tax cutting plans triggered financial chaos.

But Truss reiterated on Sunday the government was sticking with the policy even as she said the decision was taken by finance minister Kwasi Kwarteng and that her cabinet of top ministers was not informed in advance.

The euro was up 0.11% to $0.98105, supported by expectations for another jumbo European Central Bank rate hike later this month following a red-hot inflation print.

Data on Friday showed that euro zone inflation zoomed past forecasts to hit a new record high of 10.0% in September, beating expectations for a reading of 9.7%.

"The ECB is still going to have to go hard ... for me, Europe and the UK, it's less about relative interest rate dynamics, and more about growth dynamics," said Weston.

"I think what we're starting to try and do now is look at markets where we can price inflation or start feeling a bit more confident about the trajectory around inflation, I think the U.S. falls into that category."

U.S. non-farm payrolls are due at the end of the week, while a flood of manufacturing PMI data out later on Monday will also give insight into the global economic outlook.

The U.S. dollar index fell 0.12% to 122.10, while the yen firmed at 144.79. Dollar/yen has held steady below the 145 level following an intervention by Japan to shore up the fragile currency.

File photograph shows an employee walking over a mosaic depicting pound sterling symbols on the floor of the front hall of the Bank of England in London
An employee is seen walking over a mosaic of pound sterling symbols set in the floor of the front hall of the Bank of England in London, in this March 25, 2008 file photograph.