© Reuters. FILE PHOTO: US dollar banknotes are shown in this illustration taken on February 14, 2022. REUTERS/Dado Rovik/Illustration
By Ankur Banerjee
SINGAPORE (Reuters) – The dollar was steady on Monday, while the yen was hovering near a seven-week peak as investors assessed moves by authorities and regulators to curb concerns about the global banking system.
The euro, which measures the currency against six rivals, rose 0.078% to 103.07, after rising 0.5% on Friday amid banking tensions, with Deutsche Bank (ETR:) is down about 9%.
Global banking stocks took a hit during the month following the sudden collapse of US lenders and the bailout of Swiss bank Credit Suisse last week, with authorities stepping in to calm investor nerves.
“Practical action by central banks, governments and the private sector has not yet been sufficient to allow investors to be confident that the problem is contained,” said Mark Chandler, chief market strategist at Bannockburn Global Forex.
The Federal Deposit Insurance Corporation said Monday that First Citizens BancShares Inc. will take over all Silicon Valley bank deposits and loans from the regulator.
The US Financial Stability Oversight Board said on Friday that the US banking system is “sound and resilient” despite the pressure on some institutions. However, investors remain cautious.
Risk-averse investors sent the yen to a seven-week high of 129.65 per dollar on Friday and the currency was on track for a 4% gain in March. It was last seen at 130.75 on Monday.
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.
Markets are pricing in more than an 80% chance of the Fed’s stance on interest rates at its next meeting in May and expect a rate cut as early as July, according to CME FedWatch.
“Contrary to the obvious signal from Powell, Fed funds futures are priced significantly higher in easing in the coming months,” Chandler said. “This is very aggressive and stretches the imagination.”
Minneapolis Federal Reserve Chairman Neel Kashkari said on Sunday that recent stresses in the banking sector and the possibility of a continuation of the credit crunch have brought the United States closer to recession.
“What’s not clear to us is how much of these banking pressures lead to a full-scale credit crunch. This credit crunch … will then slow the economy,” Kashkari said in comments to CBS’s “Face the Nation.” “This is something we are watching very closely.”
Meanwhile, the euro rose 0.05% to $1.0764 after falling 0.6% on Friday. The British pound was at $1.2235, up 0.05% on the day, after falling 0.5% on Friday.
The Australian dollar rose 0.09%, to $0.665. It increased by 0.03%, at $0.620.
In cryptocurrencies, bitcoin was last up 0.84% to $27,861.02. It rose last 0.71% to $1,763.39.
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The currency bid prices are at 0545 GMT
Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid
previous change
a class
EUR/USD 1.0765 $1.0762 +0.03% +0.47% +1.0780 +1.0759
USD/JPY 130.7800 130.7050 +0.02% -0.39% +131.0400 +130.6400
EUR/JPY 140.78 140.60 +0.13% +0.34% +141.0800 +140.5800
USD/CHF 0.9184 0.9197 -0.09% -0.63% +0.9199 +0.9182
GBP/USD 1.2234 1.2229 +0.12% +1.24% +1.2251 +1.2227
USD/CAD 1.3732 1.3760 -0.20% +1.35% +1.3743 +1.3725
AUD/USD 0.6649 0.6643 +0.11% -2.44% +0.6662 +0.6637
NZ 0.6201 0.6201 +0.02% -2.32% +0.6212 +0.6192
dollars / dollars
All spots
locations in Tokyo
Spots in Europe
twists
Tokyo forex market information from Bank of Japan