The University of Michigan's survey of consumer
sentiment fell for the first time in four months even as
readings on inflation expectations receded. The survey was
mostly done before regulators shut SVB last week.
Preliminary results on economic conditions and consumer expectations also slid, the UMich surveys showed.
The dollar index , a measure of the dollar against six other currencies,
fell 0.249% , while the euro was
up 0.26% to $ 1.0633 .
Contracts in the fed funds futures show a 74.5% probability of the Federal Reserve will raise interest rates by a one-quarter percentage point next week, CME's FedWatch Tool shows.
But expectations also show the Fed will be cutting rates
by July as recession fears mount.
"There's this belief that we're heading towards a
recession and depending on if the Fed makes a policy mistake, it
can be a really severe one," said Ed Moya, senior market analyst
at OANDA in New York.
"There is a wait and see approach as to what will happen with the U.S. economy," he said. "Now we're not debating a‘soft landing, no landing.’ We're debating is it a mild or severe recession."
The rescue of First Republic on Thursday initially boosted risk appetite on Friday as concerns about global banks eased, making way for surges in the Australian and New Zealand dollars. Banking troubles revived memories of the 2008 financial crisis, in which dozens of institutions failed or were bailed out with billions of dollars of government and central bank money. Three smaller U.S. lenders, including First Republic, have had regulators and other banks step in to prop them up, while in Europe, Credit Suisse became the first major global bank since the financial crisis to get an emergency lifeline.
Sterling was last trading at $1.2144, up 0.31% on the day, while the dollar fell 0.17% against the Swiss franc. Earlier in the week, the franc plunged by the most against the dollar in a day since 2015, when the Swiss central bank loosened its currency peg. The Japanese yen , which tends to benefit in times of extreme market volatility or stress, strengthened 1.28% versus the greenback at 132.05 per dollar.
Japan's Ministry of Finance, Financial Services Agency and Bank of Japan officials met on Friday evening to discuss financial markets.
Masato Kanda, vice finance minister for international affairs, told reporters after the trilateral meeting that the government, the central bank and the banking watchdog would coordinate to ensure the stability of the financial system. The Australian dollar , which often outperforms when investors are feeling optimistic, rose 0.44% at $0.668. Currency bid prices at 11:07 a.m. (1507 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change
Session
Dollar index 104.1100 104.3900 -0.25% 0.599% +104.4400 +103.8900
Euro/Dollar $1.0634 $1.0611 +0.21% -0.77% +$1.0670 +$1.0611
Dollar/Yen 132.0350 133.7800 -1.30% +0.71% +133.7350 +131.8200
Euro/Yen 140.40 141.91 -1.06% +0.09% +142.2000 +140.1700
Dollar/Swiss 0.9276 0.9293 -0.15% +0.35% +0.9299 +0.9241
Sterling/Dollar $1.2144 $1.2110 +0.30% +0.43% +$1.2175 +$1.2103
Dollar/Canadian 1.3757 1.3722 +0.30% +1.57% +1.3762 +1.3679
Aussie/Dollar $0.6684 $0.6658 +0.41% -1.93% +$0.6724 +$0.6650
Euro/Swiss 0.9863 0.9859 +0.04% -0.30% +0.9881 +0.9841
Euro/Sterling 0.8754 0.8760 -0.07% -1.02% +0.8782 +0.8745
NZ Dollar/Dollar $0.6252 $0.6196 +0.90% -1.54% +$0.6260 +$0.6192
Dollar/Norway 10.7320 10.7700 -0.23% +9.49% +10.7660 +10.6700
Euro/Norway 11.4156 11.4211 -0.05% +8.78% +11.4364 +11.3507
Dollar/Sweden 10.5172 10.5049 +0.18% +1.04% +10.5515 +10.4430
Euro/Sweden 11.1784 11.1582 +0.18% +0.26% +11.2054 +11.1239
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates SVB Financial seeks bankruptcy protection as banking turmoil persists ECB watchdog sees no Europe contagion after US, Swiss bank rescues First Republic shares fall despite unprecedented Wall Street rescue deal GRAPHIC-Banking worries send US markets on dizzying ride Major US banks inject $30 bln to rescue First Republic Bank ANALYSIS-Is the backlash over SVB collapse a threat to 'woke' investments? ANALYSIS-SVB's climate tech clients face humbling funding questions ANALYSIS-Investors stick to bets on early end to ECB hikes as uncertainty grows GRAPHIC-Markets tumble then recover amid bank crisis GRAPHIC-Americans opt to keep their money with the banks GRAPHIC-Majority of Americans oppose a bank bailout ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Rae Wee in Singapore; Editing by Kirsten Donovan, Susan Fenton and Nick Zieminski)
