© Reuters. FILE PHOTO: An illustrative photo showing $100 banknotes is taken in Tokyo on August 2, 2011. REUTERS/Yuriko Nakao
by Hannah Lang
WASHINGTON (Reuters) – The euro and sterling fell sharply against the strong dollar on Friday amid persistent jitters about banks.
Bank stocks in Europe fell by heavy weights Deutsche Bank (ETR:) and UBS Group have become increasingly concerned that the worst problems the sector has suffered since the 2008 financial crisis are yet to be contained.
It rose 0.536%, to 103.140, with the euro slipping 0.71%, to $1.0753.
“Over many years, whenever there are perceived or actual problems that look like they might be deeply rooted, people will turn to the dollar, and I think that’s probably all there is to it now,” said Joseph Trevisani, senior analyst at FXStreet.com. .
Risk aversion also sent sterling down 0.53% to $1,222, despite data showing that the UK economy was poised to grow in the first quarter and confidence was growing.
The pound touched a seven-week high of $1.2341 on Thursday in choppy trade after the Bank of England raised interest rates by 25 basis points to 4.25%, but said a sudden rebound in inflation was likely to fade quickly, fueling speculation that it had ended its trading session. walking long distances.
Bank stocks have been hit hard this month in the wake of the sudden failure of two regional lenders in the US and the emergency sale of Swiss bank Credit Suisse to rival UBS.
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The forex world seems to be signaling a risk-averse frenzy with safe-haven proxies, with gold and the yen outperforming most other currencies, according to Christopher Wong, currency strategist at OCBC.
The Japanese yen is still up only 0.08% against the dollar at 130.73 per dollar.
“The most puzzling behavior in light of this is the fact that the yen is just a touch stronger — you could say it’s largely unchanged,” said Paresh Upadhyaya, director of fixed income and currency strategy at Amundi US. “I would have thought in this environment you would see a stronger yen.”
The Federal Reserve on Wednesday raised interest rates by 25 basis points, as expected, but took a cautious stance on the outlook due to banking sector turmoil even as Fed Chairman Jerome Powell kept the door open for more rate hikes if needed.
US Treasury Secretary Janet Yellen confirmed on Thursday that she is ready to take further measures to ensure that Americans’ bank deposits remain safe, to calm investor nerves.
Trevisani said markets will closely watch next week’s reading of the personal consumption expenditures (PCE) price index, due March 31, for indications of how the print will affect the Fed’s upcoming interest rate decisions.
“If you get a number as expected or weaker, I think that gives the Fed a reason to back off, which they do anyway,” he said.
In cryptocurrencies, bitcoin price was last down 2.16% to $27,732.00.
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Coin offer prices at 2:30pm (1830GMT)
Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid
previous change
a class
Dollar Index 103.1400 102.6000 +0.54% -0.338% +103.3600 +102.5000
EUR/USD $ 1.0754 $ 1.0832 -0.71% + 0.38% + $ 1.0839 + $ 1.0714
USD/JPY 130.7500 130.8300 -0.07% -0.28% +130.9300 +129.6450
EUR/JPY 140.62 141.73 -0.78% +0.23% +141.8500 +139.0800
USD/CHF 0.9201 0.9164 +0.42% -0.48% +0.9216 +0.9157
GBP/USD $1.2220 $1.2285 -0.53% + 1.05% + $1.2290 + $1.2192
USD/CAD 1.3739 1.3716 +0.16% +1.40% +1.3804 +1.3710
AUD/USD 0.6642 USD 0.6684 -0.60% -2.54% + 0.6694 USD + 0.6625 USD
EUR/CHF 0.9894 0.9925 -0.31% -0.01% +0.9940 +0.9850
EUR/GBP 0.8800 0.8814 -0.16% -0.50% +0.8828 +0.8778
0.6201 NZD 0.6249 NZD -0.74% -2.31% + 0.6252 NZD + 0.6193
dollars / dollars
Dollar / Norway 10.4900 10.4010 +0.81% +6.84% +10.5850 +10.3810
Euro / Norway 11.2771 11.2504 +0.24% +7.47% +11.3575 +11.2366
Dollar / Sweden 10.4317 10.3248 +0.21% +0.23% +10.4726 +10.3055
Euro / Sweden 11.2137 11.1901 +0.21% +0.62% +11.2302 +11.1758