Dollar declines for second straight session

Economies.com
2023-03-17 12:14PM UTC

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.

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