He dollar hit a two-day high against the Japanese yen on Monday as authorities’ efforts to curb concerns about the global banking system helped calm investor nerves.
However, the US currency was trading in a tight range against most major currencies as investors seemed hesitant to place big bets in either direction as they sought clarity on the consequences of the recent bankruptcy of two lenders. Americans and the Credit Suisse bailout.
“It looks like a tired market, with very tight overnight ranges and very light volumes,” said Brad Bechtel, global head of FX at Jefferies.
“This week’s schedule is a little lighter than it has been in a while and there were no emergencies over the weekend to keep everyone busy, so we opened in a state of anxious calm,” Bechtel said.
Find out more – What does the market expect in the short term, after the measures to calm the dollar?
Global bank stocks, hit this month by the sudden failures of Silicon Valley Bank and Signature Bank, received some reprieve Monday after the Federal Deposit Insurance Corporation said First Citizens BancShares Inc would acquire all deposits and loans from Silicon Valley Bank’s regulator.
This helped ease some contagion fears in Europe, with an index of European bank shares rising 1.48%, led by Deutsche Bank jumping 6.31% after an 8.5% drop on Friday. The S&P 500 Banks Index rose 2.39%.
The easing of concerns helped the dollar rise 0.59% to 131.51 yen, reversing some of its recent losses against the Japanese currency. Investor risk aversion had pushed the yen to a seven-week high of 129.65 to the dollar on Friday, and the currency was on track to post a 3.5% gain in March.
The dollar index, which measures the currency against six rivals, was broadly stable at 102.97, not far from the nearly seven-week low of 101.91 hit on Thursday.
The euro was up 0.19% at $1.07825 after reports on Monday that German business morale unexpectedly improved in March despite turmoil in the banking sector.
The US Federal Reserve raised interest rates by 25 basis points on Wednesday, as expected, but took a cautious stance on the outlook due to turmoil in the banking sector. However, its chairman, Jerome Powell, kept the door open to further rate hikes if necessary.
Sterling rose on Monday as investors regained their appetite for risky assets ahead of a speech by Bank of England Governor Andrew Bailey. The British currency gained 0.39% to $1.2276.
By Ankur Banerjee and Samuel Indyk, from Reuters agency
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
