The dollar drifted 0.2% higher on the yen to
133.07 yen.
Through March, U.S. interest rate markets dramatically
repriced the outlook and now see a roughly 40% chance that the
Federal Reserve is finished with rate increases. Fed funds
futures have priced rate cuts by year's end. "The dollar is likely to be range-bound until the impact is
a little clearer but if the re-pricing of the outlook for U.S.
rates sticks, it’s got a fair bit further to fall," Societe
Generale analysts said in a note.
"The saga must have an impact on both credit demand and
supply and unless economic data recover very quickly, the end of
the Fed rate-hiking cycle is surely much closer now, and the
dollar remains way above long-term average levels in real
terms," they said, in reference to recent banking turmoil.
The collapse of Silicon Valley Bank three weeks ago
unleashed broader worries about banking confidence around the
world - forcing Credit Suisse into the arms of rival UBS and
sending bank shares sliding from London to Tokyo.
Currency markets were in general steadier than stocks and
did not reflect the wild volatility seen in bond trade, though
the yen - seen as a safe haven thanks to Japan's status as the
world's biggest creditor - is up 2.5% for the month.
This week, the yen is down about 1.7% on the dollar.
"This week we have a recovery in risk sentiment because we
haven't had any major bad news about Europe or U.S. financial
institutions," said Yujiro Goto, chief FX strategist at Nomura
Securities in Tokyo.
"How risk sentiment is traded in the next week will be key
for dollar/yen."
Another so-called safe-haven, the Swiss franc , has
had a wild month as it rose in the wake of Silicon Valley Bank's
collapse, then dived as bank jitters hit Switzerland.
It looks set to end the month up 3% on the dollar.
Next week, central bank meetings loom in Australia and New
Zealand, and markets have priced a pause for Australia and
step-down in pace to a 25 basis point increase for New Zealand. On Friday, the New Zealand dollar broke above its
50-day moving average and stood at a nearly two-week high of
$0.6296. It is about 1% lower for the quarter. The Australian dollar was steady at $0.6715 and is
close to testing its 200-day moving average. It is also about
1.3% lower on the quarter.
Both currencies found support from expanding Chinese
manufacturing activity, though data on Friday showed the pace
was slowing down. China's yuan inched higher.
Sterling held at $1.2387 on Friday and is eyeing a
quarterly gain of 2.5% as investors reckon scorching hot British
inflation will require more rate rises to tame.
========================================================
Currency bid prices at 0552 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.0899 $1.0905 -0.05% +1.72% +1.0925 +1.0897
Dollar/Yen 132.9600 132.4450 +0.44% +1.37% +133.5000 +132.6800
Euro/Yen <EURJPY=EB
S> 144.93 144.70 +0.16% +3.30% +145.6600 +144.5800
Dollar/Swiss 0.9144 0.9132 +0.14% -1.10% +0.9149 +0.9125
Sterling/Dollar 1.2387 1.2387 +0.00% +2.43% +1.2423 +1.2384
Dollar/Canadian 1.3526 1.3522 +0.07% -0.13% +1.3532 +1.3509
Aussie/Dollar 0.6715 0.6713 +0.04% -1.48% +0.6738 +0.6707
NZ Dollar/Dollar 0.6287 0.6262 +0.41% -0.98% +0.6297 +0.6261
All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Tom Westbrook; Editing by Gerry Doyle, Robert Birsel)
