The U.S. dollar lost ground at the start of trading in Europe on Friday and riskier currencies rose as concerns about a global banking crisis eased.
At 10:25 am (CET), the Dollar Index, which tracks the currency’s performance against a basket of six other major currencies, fell 0.4% to 103.715.
The foreign exchange market has seen a relief rally after several large U.S. banks pumped $30 billion into deposits into the First Republic Bank, backing the regional bank that had been caught in the hangover from the collapse of two other smaller U.S. banks last week.
The move came after Credit Suisse announced on Thursday it would borrow up to $54 billion from the Swiss National Bank, ensuring the embattled lender had enough liquidity to deal with large withdrawals in the wake of a series of banking scandals.
The pair EUR/USD A rise of 0.5% to the level of 1.0659 is targeted, boosted by Thursday’s decision of the European Central Bank to go ahead with the 50 basis point rate hike it had previously announced in the face of banking turbulence.
This suggests that ECB monetary policymakers remain confident in the underlying strength of the euro area banking sector.
In her usual press conference, the president Christine Lagarde He walked the fine line between cracking down on inflation and recognizing the need for caution in the face of growing signs of risks to financial stability.
The final data for the euro area (the CPI) will be published in the course of this day, and everything indicates that they will show that inflation grew by 0.8% monthly in February and 8.5% in the whole of the year.
The pair GBP/USD A rise of 0.5% is pointed to the level of 1.2166, the AUD/USD soars 0.8% to 0.6708, the NZD/USD It rose 0.8% to 0.6246, while the USD/JPY It fell 0.3% to 133.32.
Japan’s government is coordinating closely with the Bank of Japan and other countries’ financial authorities to avoid the fallout from the banking difficulties of several Western banks, Finance Minister Shunichi Suzuki said on Friday.
U.S. economic data will focus on reading the Consumer confidence From the University of Michigan’s March to be released Friday, which will provide clues about how Americans are coping with current economic hardship.
That said, the focus will now be on the Federal Reserve’s monetary policy. meeting next week, as expectations rise that the U.S. central bank may slow its aggressive rate hike campaign in a bid to ease the strain on the financial sector.
Markets now value at almost 90% the possibility of the Fed raising the Types by 25 basis points next week.