The U.S. currency, however, traded in a narrow range against
most major currencies as investors appeared hesitant to place
big wagers in either direction as they sought clarity on the
fallout from the recent collapse of two U.S. lenders and the
rescue of Credit Suisse .
"Feels like a market that is tired with overnight ranges
very narrow and volumes very light," said Brad Bechtel, global
head of FX at Jefferies.
"The calendar is a bit lighter this week than it has been in
a while and there were no emergencies over the weekend to keep
everyone busy and so we open in a state of anxious calm,"
Bechtel said.
Global banking stocks, which have been battered this month
following the sudden collapse of Silicon Valley Bank and
Signature Bank, received some respite on Monday after the
Federal Deposit Insurance Corporation said First Citizens
BancShares Inc would acquire all of Silicon Valley
Bank's deposits and loans from the regulator.
This helped ease some fears of contagion in Europe with an index of European banking shares up up 1.48%, led by Deutsche Bank which jumped 6.31% after an 8.5% slide on Friday. The S&P 500 Banks Index was up 2.39%. Easing worries helped the dollar rise 0.59% to 131.51 yen, reversing some of its recent losses against the Japanese currency. Risk-averse investors had sent the yen to a seven-week high of 129.65 per dollar on Friday and the currency was on track to clock a 3.5% gain in March.
The dollar index , which measures the currency against six rivals, was about flat on the day at 102.97, not far from the near 7-week low of 101.91 touched on Thursday. The euro was 0.19% higher at $1.07825, after data on Monday showed German business morale unexpectedly improved in March despite the banking sector turmoil.
"The USD is narrowly mixed and may continue to range trade in the short run," Shaun Osborne, chief currency strategist at Scotiabank, said in a note. The U.S. Federal Reserve on Wednesday raised interest rates by 25 basis points, as expected, but took a cautious stance on the outlook because of the banking sector turmoil. However, Chair Jerome Powell kept the door open for further rate rises if necessary. Markets are pricing in around a 55% chance of the Fed standing pat on interest rates in its next meeting in May and anticipate a rate cut as early as July.
Sterling edged higher on Monday, with investors' appetite for risky assets returning as they awaited a speech from Bank of England (BoE) governor Andrew Bailey later in the day. The British bound was up 0.39% at $1.2276. In cryptocurrencies, bitcoin last rose 0.25% to $27,697, edging closer to the 9-month high of $28,917.46 hit last week. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Saqib Aiqbal Ahmed; Additional reporting by Ankur Banerjee in Singapore and Samuel Indyk in London, Editing by Gerry Doyle, Ed Osmond, Sharon Singleton and Ken Ferris)
1971; Reuters Messaging: saqib.ahmed.thomsonreuters.com@reuters.net))