Forex: Dollar steady as banking crisis fears linger

First Citizens Bancshares (Tennessee)

27/03/2023 06:59

By Ankur Banerjee
       SINGAPORE, March 27 (Reuters) - The dollar was steady on
Monday, while the yen hovered near its seven-week peak as
investors assessed moves made by authorities and regulators to
rein in worries over the global banking system. 
    The dollar index  =USD , which measures the currency against
six rivals, rose 0.078% at 103.07, having gained 0.5% on Friday
amid banking jitters, with shares of Deutsche Bank   DBKGn.DE 
sliding nearly 9%. 
    Global banking stocks have been battered through the month 
in the wake of the sudden collapse of two U.S. lenders and the
rescue of embattled Swiss bank Credit Suisse  CSGN.S  last week,
with authorities stepping in to ease investors nerves. 
    "Pragmatic action by central banks, governments, and the
private sector has thus far been insufficient to allow investors
to be confident that the problem is ring-fenced," said Marc
Chandler, chief market strategist at Bannockburn Global Forex.
    On Monday, the Federal Deposit Insurance Corporation said
First Citizens BancShares Inc  FCNCA.O  would acquire all of
Silicon Valley Bank's  SIVB.O  deposits and loans from the
regulator.     
    The U.S. Financial Stability Oversight Council said on
Friday the U.S. banking system was "sound and resilient" despite
stress on some institutions. Investors, though, remain wary. 
    Risk-averse investors sent the yen  JPY=EBS  to a seven-week
high of 129.65 per dollar on Friday and the currency was on
track to clock a 4% gain in March. It was last at 130.75 on
Monday.    
    The Fed on Wednesday raised interest rates by 25 basis
points, as expected, but took a cautious stance on the outlook
because of banking sector turmoil even as Fed Chair Jerome
Powell kept the door open on further rate rises if necessary.
     Markets are pricing in a more than 80% chance of the Fed's
standing pat on interest rates in its next meeting in May and
anticipate a rate cut as early as July, according to CME
FedWatch tool.  
    "Contrary to the clear signal from Powell, the Fed funds
futures are pricing in dramatic easing in the coming months,"
Chandler said. "This is extremely aggressive and stretches the
imagination."
    Minneapolis Fed president Neel Kashkari said on Sunday the
recent stress in the banking sector and the possibility of a
follow-on credit crunch has brought the U.S. closer to
recession. 
    "What's unclear for us is how much of these banking stresses
are leading to a widespread credit crunch. That credit crunch
... would then slow down the economy," Kashkari said in comments
to CBS show Face the Nation. "This is something we are
monitoring very, very closely."    
    Meanwhile, the euro  EUR=EBS  was up 0.05% to $1.0764, after
falling 0.6% on Friday. Sterling  GBP=  was at $1.2235, up 0.05%
on the day, having slid 0.5% on Friday.  
    The Australian dollar rose 0.09% to $0.665. The kiwi was up
0.03% at $0.620.
    In cryptocurrencies, bitcoin  BTC=  last rose 0.84% to
$27,861.02. Ethereum  ETH=   ETH=BTSP  last rose 0.71% to
$1,763.39.
    
    ========================================================
    Currency bid prices at 0545 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar       EUR=EBS    $1.0765        $1.0762     +0.03%         +0.47%      +1.0780     +1.0759
 Dollar/Yen        JPY=EBS    130.7800       130.7050    +0.02%         -0.39%      +131.0400   +130.6400
 Euro/Yen                                                                                     
 Dollar/Swiss      CHF=EBS    0.9184         0.9197      -0.09%         -0.63%      +0.9199     +0.9182
 Sterling/Dollar   GBP=D3     1.2234         1.2229      +0.12%         +1.24%      +1.2251     +1.2227
 Dollar/Canadian   CAD=D3     1.3732         1.3760      -0.20%         +1.35%      +1.3743     +1.3725
 Aussie/Dollar     AUD=D3     0.6649         0.6643      +0.11%         -2.44%      +0.6662     +0.6637
 NZ                NZD=D3     0.6201         0.6201      +0.02%         -2.32%      +0.6212     +0.6192
 Dollar/Dollar                                                                                  
                                                                                                
    
All spots  FX= 
Tokyo spots  AFX= 
Europe spots  EFX=  
Volatilities  FXVOL=  
Tokyo Forex market info from BOJ  TKYFX  

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World FX rates    https://tmsnrt.rs/2RBWI5E
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 (Reporting by Ankur Banerjee in Singapore. Editing by Gerry
Doyle)
 ((ankur.banerjee@thomsonreuters.com;; Mobile - +65 8121 3925;
Twitter: @AnkurBanerjee17;))