The NZ dollar weakened against most major currencies in the Asian session on Monday ahead of the U.S. Federal Reserve monetary policy meeting due this week, with focus on whether policy makers will increase its outlook for rates.

Economists expect that the policy makers will increase its forecast track for the federal funds rate and drop its reference to remain low for "a considerable period" as a slew of economic data shows the world's biggest economy is on the path to recovery.

The decline in the oil price also weighed on the currency. Crude oil plummeted to a fresh 5-year low on Friday, on falling demand and oversupply concerns. Adding to it, the International Energy Agency slashed the demand growth forecast for 2015 for the fourth time in five months, even as the dollar weakened against some major currencies.

Traders also await the GlobalDairyTrade auction due on Wednesday for a steer on prices for New Zealand's primary commodity export.

In the economic news, the Reserve Bank of New Zealand's new weightings for the trade-weighted index declined to 78.04 from 78.56 last week.

Meanwhile, Asian stocks are trading lower with mounting worries about the health of the global economy on the back of recent weak data from China and Europe as well as sliding crude oil prices triggering a sell-off.

Last Friday, the NZ dollar fell 0.61 percent against the U.S. dollar and 0.49 percent against the euro.

In the Asian trading today, the NZ dollar fell to 5-day lows of 0.7729 against the U.S. dollar and 1.6085 against the euro, from last week's closing quotes of 0.7767 and 1.6008, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.76 against the greenback and 1.62 against the euro.

Against the Australian dollar, the kiwi slipped to a a 4-day low of 1.0634, from an early 4-day high of 1.0564. On the downside, 1.07 is seen as the next support level for the kiwi.

Looking ahead, U.S. industrial production for November and NAHB housing market index for December are due to be released in the New York session.

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