Dollar declined in European trade against a basket of major rivals for the second day, as demand slows down on the greenback with calm spreading in the markets regarding the banking crisis. 

Authorities and banks moved to reduce pressure on the financial sector, in turn improving risk appetite and reducing demand on havens and increasing demand on higher risk currencies such as euro and the pound.

The Index

The dollar index fell 0.5% to 103.90, with a session-high at 104.45, after losing 0.3% yesterday, the first loss in three days as demand slowed down with the Credit Suisse crisis averted. 

Fears Quenched 

Concerns about Credit Suisse calmed down following the Swiss National Bank's assurances of providing needed liquidity to Switzerland's second bank, which announced it'll borrow 50 billion francs from the central bank.

Swiss media said that the government held an emergency meeting to discuss the issue in order to avoid a banking crisis in the country.

In the US, major banks deposited nearly $30 billion in the First Republic bank to avoid a similar crisis to the one that hit Silicon Valley Bank and Signature bank.

US Rates

Current pricing for a 0.25% rate hike in the US in March stands at 79%, with pricing for no change in rates standing at 21%.

Consumer Confidence 

Investors await important US data on consumer confidence from the University of Michigan, with its index expected at 66.9 in March, barely down from 67.0 in February.

Silver prices rose in European trade after a short hiatus from gains yesterday off five-week highs, with  the dollar currently declining against major rivals.

The white metal is heading for the largest weekly profit in 2023 on strong demand for safe havens amid growing concerns about the global banking sector following the collapse of several local US banks and the crisis with the Credit Suisse bank in Europe.

Silver Prices Today

Silver prices rose 1.4% to $22 an ounce, with a session-low at $21.65, after losing 0.4% yesterday on profit-taking away from five-week highs at $21.53.

The Dollar

The dollar index fell 0.4% on Friday for the second session against a a basket of major rivals, underpinning silver prices.

Dollar's current decline comes as calms spread in the global markets with US and Swiss authorities intervening to provide financial support to the banking system.

Weekly Trades

Silver prices are up over 7% so far this week on track for the second largest weekly profit in three weeks, and the largest since November 2022. 

Haven demand on silver remains strong following the collapse of the SVB and two other banks in the US, and the troubles facing the Swiss Credit Suisse bank.

Chinese Demand

Recent data showed China's industrial output accelerating in February, with Chinese retail sales rising as expected in February.

Such data bolstered hopes of improving Chinese activities and improving demand on precious metals after the government eased Covid 19 restrictions. 

Gold prices rose in European trade on Friday, maintaining gains for the third straight session and hovering near six-week highs as the greenback declines against major rivals. 

Gold is on track for the third weekly profit in a row, and the largest in 2023 amid increasing demand on safe havens due to concerns about the global banking system.

Gold Prices Today

Gold prices rose 0.7% to $1,934 an ounce, after rising 0.1% yesterday, the second profit in a row, and after hitting six-week highs earlier at $1,937 on the Credit Suisse bank crisis. 

The Dollar

The dollar index fell 0.5% on Friday for the second session against a a basket of major rivals, underpinning gold prices. 

As cautious calm spreads in the market, demand on dollar as an alternative investment cooled with higher risk currencies such as euro and the pound gaining. 

Weekly Trades

Gold prices are up 3.6% so far this week, on track for the third largest weekly profit in a row, and the largest profit in 2023.

Haven demand on gold prices remain strong following the collapse of the SVB and two other banks in the US, and the troubles facing the Swiss Credit Suisse bank.

Analysis

Several analysts note that banking concerns continue to buoy gold prices amid ongoing risks, while central banks are expected to reduce the pace of rate hikes.

Investors continue to seek havens to deposit and safeguard their investments away from the banking sector, underpinning gold. 

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 914.72 tones, the highest since February 28.

Australian dollar rose against most major rivals, following strong jobs data while concerns about the banking crisis in the US and Switzerland calm down.

The government reported an increase of 64.6 thousand jobs in February, while analysts expected an increase of 46.7 thousand. 

Australia's unemployment fell to 3.5% last month from 3.7%, while analysts expected a drop to 3.6%. 

AUD/USD rose 0.5% to 0.6653 as of 19:02 GMT. 

The Dollar

The dollar index fell 0.3% to 104.3 as of 18:54 GMT, with a session-high at 104.7, and a low at 104.2. 

US unemployment claims fell to 192 thousand in the week ending March 11 from 211 thousand, below estimates of 205 thousand.

The Euro

EUR/USD rose 0.3% to 1.0613, as of 19:05 GMT.

The European Central Bank voted to increase interest rates by 50 basis points for the third time in a row to 3.5%, the highest since 2008, and matching expectations.

The ECB didn't present any details about future moves even as inflation remains stubbornly high.