The Australian dollar weakened slightly against the U.S. dollar at 0112 GMT, pressured by another leg down in artificial intelligence and chip stocks and new highs in long-term government bond yields, according to Richard Franulovich, head of FX Strategy at Westpac. These factors are collectively sapping risk sentiment and the AUD. With the currency breaking below initial support at US$0.7085, the next support is pegged at US$0.7040. The AUD was 0.1% lower at US$0.7076.

At 0055 GMT, Asian currencies consolidated against the dollar but faced pressure from worsening risk appetite. UOB's Global Economics & Markets Research team noted a third straight session of U.S. equity selloffs overnight. The dominant market risks remain the ongoing U.S.-Iran conflict and the impending U.S.-Canada tariff deadline, with a 50% tariff on certain Canadian goods set to take effect Wednesday absent an agreement.

The U.S. dollar was 0.1% lower at 159.43 yen and little changed at 1.2785 Singapore dollars, while the Australian dollar slipped 0.1% to US$0.7078.