The Australian dollar has fallen Monday, buying 68.73 US cents from 69.02 US cents on Friday.

Last Friday, the local currency was heading for a steep weekly loss as investors wager that aggressive rate cuts will be needed given soft economic data at home and the fallout from China-US tariffs globally.

The Aussie eased to 68.92 US cents on Friday and was down 1.5 per cent for the week so far in the biggest fall for the currency since mid-May.

It has buckled as markets priced in ever larger, and earlier, rate cuts amid a global shift toward renewed central bank stimulus.

Futures imply a 66 per cent probability the Reserve Bank of Australia will follow up its recent quarter-point easing with another in July and, if not, a reduction to 1.0 per cent is considered a done deal by August.

A mixed labour report this week also fuelled speculation the RBA would have to cut even deeper, with the market pricing a move to 0.75 per cent by the turn of the year.

NAB on Friday became just the latest bank to join the pack and tip a move under 1.0 per cent.

“The forecast of a larger reduction reflects our judgment that the economy is losing momentum and is weaker than reflected in the Reserve Bank’s recently downgraded near-term growth outlook,” said NAB group chief economist Alan Oster.

“The loss of momentum is apparent in private demand, which has barely grown over the past year, and more timely indicators.”

The shift in expectations has driven bond yields to historic lows with the yield on three-year paper breaking under the 1.0 per cent barrier for the first time ever.

It was last at 0.984 per cent having fallen nine basis points this week.

Likewise, the three-year bond contract hit a record high on Friday and was last up 1 tick at 99.005.

The 10-year contract gained 2.75 ticks to 98.6125, implying a yield of 1.39 per cent.