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Friday, March 31, 2023

Super dollar falls to 1-month lows after Goldman Sachs rate report

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He dollar falls this Monday before the growing expectations that the Federal Reserve to be less aggressive on monetary policy, after the authorities intervened to limit the consequences of the sudden failure of Silicon Valley Bank.

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The US government announced several measures earlier in the Asian session, saying all SVB clients will have access to their deposits from Monday. Authorities also said depositors at New York’s Signature Bank, closed Sunday by the New York state financial regulator, they would be compensated without loss for the taxpayer.

The Federal Reserve announced that it would make additional funds available through a new Term Bank Financing Program, which would offer loans of up to one year to depository institutions, backed by Treasury bonds and other assets held by these institutions.

Market turmoil in the aftermath of the SVB bankruptcy had investors speculating that the Fed might not raise interest rates by 50 basis points this month. Attention will now turn to inflation data for Tuesday to gauge the tone of the Federal Reserve.

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The dollar index, which measures the performance of the US currency against six other currencies, fell 0.55% to 103.67, near one-month lows. after Goldman Sachs said it no longer expects the Federal Reserve to raise rates at its March 22 meeting. Subsequently, the index traded at 103.92.

Meanwhile, the euro was up 0.67% at $1.0704, near a one-month high of $1.0737 hit earlier, ahead of the European Central Bank’s policy meeting on Thursday. The yen rose 0.8% to 133.88 per US dollar, after hitting a one-month high of 133.58 earlier in the session, while the greenback fell 0.6% against to the Swiss franc, to 0.9155 units per dollar and the pound sterling rose 0.57% to 1.2105 dollars.

Source: Ambito

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