March,27(Agencies)–US dollar stays firm on Monday, Yen hovered near its seven-week peak as investors assessed moves made by authorities and regulators to rein in worries over the global banking system.
Risk-wary investors sent the yen was last at 130.70 on Monday to a seven-week high of 129.65 per dollar on Friday. The dollar index, which measures the currency against six rivals, was up 0.078% at 103.060, having gained 0.5% on Friday amid banking jitters, with shares of Deutsche Bank sliding nearly 9%.
Markets are pricing in an 87% chance of the Fed’s standing pat on interest rates in its next meeting in May and anticipate a rate cut as early as July, according to CME FedWatch tool.
Global banking stocks have been battered through the month in the wake of the sudden collapse of two US lenders and the rescue of embattled Swiss bank Credit Suisse last week, with authorities stepping in to ease investors nerves.
US Financial Stability Oversight Council told on Friday the US banking system was “sound and resilient” despite stress on some institutions. Investors, though, remain wary. “Pragmatic action by central banks, governments, and the private sector has thus far been insufficient to allow investors to be confident that the problem is ring-fenced,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.
Risk-wary investors sent the yen to a seven-week high of 129.65 per dollar on Friday, was last at 130.70 on Monday
The Fed on Wednesday raised interest rates by 25 basis points, as expected, but took a cautious stance on the outlook because of banking sector turmoil even as Fed Chair Jerome Powell kept the door open on further rate rises if necessary.
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