Dollar declines after Fed's remarks on US recession

Economies.com
2023-03-27 12:22PM UTC

Dollar declined in European trade against a basket of major rivals after a two-day hiatus from losses, following remarks from Fed officials on a potential US recession.

 

Dollar was also pressured by weak demand on safe havens as the banking crisis eases with authorities moving briskly to support the banking sector. 

 

The Index

 

The dollar index fell 0.15% to 102.98, with a session-high at 103.22, after rising 0.5% on Friday, the second profit in a row off seven-week lows at 101.92. 

 

The index lost 0.7% last week, the second weekly loss in a row following Fed's meeting which sparked speculation about the end of the current policy tightening cycle. 

 

Fed Remarks and Rates

 

Minneapolis Fed President Neil Kashkari said the recent pressures on the banking sector and the potential for a credit crisis later made the US closer to recession.

 

Pricing for no change in US interest rates at the May 3 Fed meeting stand at 80%, while pricing for 0.25% rate hike stands at 20%.

 

Banking Fears Subside

 

In the US, authorities continue to take measures to underpin the US banking sector and restore confidence.

 

US authorities believe the banking sector is strong and flexible despite ongoing pressure on some institutions.

 

Authorities also study an emergency lending program to banks to support struggling banks like First Republic.

 

Already, the First Citizens BankShares agreed to purchase Silicon Valley Bank in a deal valued at $16.5 billion that carries all of the bank's deposits and loans.

Forex and Currency News

Forex News

Forex

Dollar hits six-week high ahead of US growth data
2024-03-28 11:38AM UTC
US Dollar's Rise in European Trade The US dollar rose in European trade on Thursday against a ...
EUR/USD news

Forex

Euro sharpens decline to five-week trough on the interest rate gap
2024-03-28 08:30AM UTC
Euro declined in European trade on Thursday against a basket of major rivals, sharpening losses for ...
Forex News

Forex

Dollar under pressure ahead of Christopher Waller's speech
2024-03-27 11:18AM UTC
The dollar declined in European trade on Wednesday against a basket of major rivals away from ...

Forex Technical Analysis

EUR USD Analysis

Forex

End of day EURUSD price forecast update - 28-03-2024
2024-03-28 17:42PM UTC
The EURUSD price provided additional negative trades to reach the thresholds of the first waited ...
NZD USD Analysis

Forex

The NZDUSD price forecast update 28-03-2024
2024-03-28 10:19AM UTC
NZDUSD Price Analysis The NZDUSD price resumes its negative trading to move away from 0.6000$ ...
AUD USD Analysis

Forex

The AUDUSD price forecast update 28-03-2024
2024-03-28 10:19AM UTC
AUDUSD Price Analysis The AUDUSD price achieved initial break to 0.6500$ level and closed the ...