MUFG Research expects the USD to remain offered into next week's FOMC policy meeting.

"The “Primary Credit” (the Discount Window) saw USD 152.9bn of liquidity support for banks while “Other Credit Extensions” captured loans to cover deposits of failed banks totalled USD 142.8bn and is guaranteed by the FDIC. So essentially we have had close to a USD 300bn expansion of the Fed’s balance sheet in a week and that could see the Fed wanting to pursue continued rate hikes, if conditions into the meeting next week allow," MUFG notes.

"A 25bp hike next week is priced at about an 80% probability. We see that as reasonable at this juncture and if no further episodes of bank stress emerge that probability will drift higher into the meeting next week. In circumstances of that scenario we would expect the dollar to remain on a weaker footing given that a hike would in our view probably be the last – some difference from the 100bps that was priced last week," MUFG adds.