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Dollar Slides As US Intervenes On Silicon Valley Bank Collapse

Dollar Slides As US Intervenes On Silicon Valley Bank Collapse

The dollar index, which measures the US currency against six rivals, fell 0.153%.


The US dollar slipped on Monday as officials moved to stem the fallout from the sudden collapse of a Silicon Valley bank, as well as investors hoped the Federal Reserve would take a less aggressive monetary path.

The US government announced a series of measures in early Asian hours on Monday, adding that all SVB customers would have access to their deposits starting Monday. Officials also said depositors of Signature Bank of New York, which was shut down by the New York state financial regulator on Sunday, would also be forgiven with no loss to the taxpayer.

The dollar index, which measures the US currency against six rivals, fell 0.153% to 104.080. The Japanese yen strengthened 0.34% to 134.52 per dollar, the highest in a month as investors flocked to safe-haven Asian currencies.

“The currency market is still digesting all the news related to the SVB collapse,” said Carol Kong, currency strategist at the Commonwealth Bank of Australia.

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“Given all the measures taken by the authorities the market should be calm, at least for the time being, but if there are concerns about regional banks, we could easily see the dollar and yen rally again.”

The euro was up 0.44% to $1.069, while sterling was last trading at $1.2085, up 0.47% on the day.

The Australian dollar rose 0.79% to $0.663, while the kiwi rose 0.36% to $0.616.

Among cryptocurrencies, bitcoin was last seen up 11.12% to $22,330.00. Ethereum was last seen up 12.12% to $1,598.90.

SVB’s collapse prompted investors to speculate that the Fed would now be reluctant to rock the boat by raising interest rates a super-sized 50 basis points this month, with the spotlight firmly on Tuesday’s inflation data.

“From the FOMC’s point of view, their concern is still inflation and inflation hasn’t really eased,” Kong said, adding that tomorrow’s CPI will continue to show that inflation continues to be high.

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“Given what has happened to the US financial system, a 25 basis point hike is more likely than a 50 basis point hike.”

Fed funds futures had only a 17% chance of a half-point gain in early trade, compared to nearly 70% before the SVB news broke last week.


Currency Quote Price at 0046 GMT

Details RIC Last US Close PCT Change YTD PCT High Bid Low Bid

last change


EUR/USD $1.0690 $1.0639 0.49% -0.22% 1.0704 1.0648

USD/JPY 134.4550 134.9200 -0.47% 2.33% 135.0050 134.2000

EUR/JPY 143.76 143.70 0.04% 2.47% 144.2100 143.1100

Dollar/Swiss 0.9183 0.9216 -0.36% -0.69% 0.9201 0.9152

Sterling/Dollar 1.2086 1.2036 0.45% -0.03% 1.2099 1.2040

Dollar/Canadian 1.3758 1.3827 -0.49% 1.55% 1.3823 1.3759

AUD/USD 0.6623 0.6582 0.65% -2.82% 0.6646 0.6587

New Zealand 0.6154 0.6135 0.31% -3.08% 0.6172 0.6140

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Tokyo forex market information from BOJ

(Except for the headline, this story has not been edited by Our Source staff and is published from a syndicated feed.)

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