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The market response to the deadly Paris attacks was fairly tepid Monday, with major stock market indexes in France, Germany and London all higher. US futures pointed to a positive open.
After Greek voters overwhelmingly rejected austerity at a weekend referendum, France and Germany urged Athens on Monday to muster further proposals and restart talks with its lenders. The country's banks have already been closed for over a week, and only emergency funding can avert their insolvency.
Fed also made changes to its projections about both the federal funds rate and GDP , showing that it is now expecting both slower growth and lower policy rates in the near future. To some, this points to a good deal more downside for the greenback.
The European common currency rode the momentum gathered overnight when the European Central Bank, in line with recent data suggesting deflationary pressures were not as pronounced as feared, raised its inflation forecast for 2015.
The region's focus fell on the Reserve Bank of Australia's policy decision due at 0430 GMT. Expectations are that the central bank would cut interest rates further in the wake of falling prices of iron ore, the country's biggest export.
"The rapid rise in yields could make the Federal Reserve nervous especially if it nears the 2.9 percent mark," said Kathy Lien, managing director of FX Strategy at BK Asset Management.
"This is a week when the Australian dollar could break USD 0.90 or squeeze higher," Kathy Lien, managing director at BK Asset Management wrote in a note late Monday, referring to the three risk events.
Talk of a rate cut usually sends a currency lower, so no wonder analysts are puzzled as the euro holds firm in the face of growing speculation that the European Central Bank will lower interest rates when it meets on Thursday.
