The Australian dollar fell amid gloom over the health of the global economic crisis after US unemployment rose to a 25-year high.
At the local close, the dollar was trading at $US0.6397, slightly lower than Friday's close of $US0.6421.
"The market is coming back to the idea the RBA will come back to resume its easing cycle,'' said Tony Morris, a senior currency strategist at ANZ.
According to calculations by ThomsonReuters, there is a 93.4% chance of the RBA cutting rates to 2.75% in April.
The RBA held rates steady last week at its monthly policy meeting, confounding some investor expectations for a 50-basis-point move.
Data the day after the decision showed Australia's economy shrank last quarter for the first time in eight years.
Rory Robertson, an interest rate strategist at Macquarie Bank, said with US inflation falling and unemployment expected to rise from a 25-year high of 8.1%, Treasury yields are seen dropping further and were weighing down on Aussie bond futures.
Yields for government debt across the world tend to move in line with US Treasuries, which rose on Monday although gains were capped by an impending massive new supply.
"US economic data screams of prolonged deflationary pressures and government bond yields will revisit earlier lows,'' Robertson said.
