Wednesday, May 31, 2023

It gave relief in the financial crisis and over dollar signs

The dollar rose for a fifth day in a row against the Japanese dollar on Monday, as efforts by authorities to curb concerns about the global banking system helped calm investor stocks.

The dollar index, which measures the currency against six rivals, was down 0.087% at 102.9, not far from a seven-week low near 101.91 hit on Thursday.

However, the dollar traded tight against major currencies as investors were not betting big on either side, waiting for clarity on the aftermath of the recent bankruptcy of two US lenders and a bailout by Credit Suisse.

“It looks like a tired market, with very tight overnight ranges and light volumes,” said Brad Bechtel, global head of FX at Jefferies.

“The weekday schedule is a little lighter than it’s been in a while and there are no events over the weekend to keep everyone busy, so we opened in a state of anxious calm,” Bechtel said.

Global bank stocks, hit this month by the sudden failures of Silicon Valley Bank and Signature Bank, will rest some Monday after the Federal Deposit Insurance Corporation said First Citizens BancShares Inc will acquire all deposits and loans from Silicon Valley Bank.

This helped ease fears of contagion in Europe, with the European bank share index rising 1.43%, led by Deutsche Bank jumping 6.15% after Friday’s 8.5% drop. The S&P 500 Banks Index rose 3.49%.

Payment concerns should help the dollar rise 0.77% to 131.75, reversing some recent losses against the Japanese currency. Investor risk aversion pushed the Japanese yen to a seven-week high of 129.65 to the dollar on Friday, and the currency was on track to post a 3.5% gain in March.

Interest rose 0.3% to $1.0794 after reports on Monday that German business remained unexpectedly better in March despite turmoil in the banking sector.

Nation World News Desk
Nation World News Desk
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