The $A bounced after the rescue of Credit Suisse boosted sentiment, but systemic worries have reduced expectations of higher interest rates globally.
Bond futures imply a 60 per cent probability that the US Federal Reserve will increase rates by 0.25 percentage points to the target range of 4.75 per cent to 5 per cent early on Thursday AEDT. Traders assigned a 40 per cent chance to the prospect that the US central bank stands pat.
The US central bank will update its forecasts this week. Fed chairman Jerome Powell could flag a policy pause, particularly if instability in the banking sector continues to flare up this week.
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