© Reuters
By Peter Nurse
Investing.com – The US dollar rose after falling near a seven-week low, as traders speculated on the Federal Reserve’s next move amid fragile confidence in the banking sector.
The main reasons for the rise:
The return of banking concerns, with the strong decline of UBS and Deutsche Bank, which faces the next big threat.. and the continuation of concerns about the performance of regional banks in the United States. As a result, it declined strongly today in light of the decline hitting the European market and the negative data. The euro recorded at 11:08 GMT the level of 1.0722, down by 1.02%. The euro is one of the heaviest components of the US dollar index and is associated with the dollar in an inverse relationship.
The most important levels:
At 03:55 ET (07:55 GMT), the US currency, which measures the greenback against a basket of six other currencies, was trading slightly higher at 102.243, above a seven-week low of 101.91. Touched on Thursday.
On Thursday, US Treasury Secretary Janet Yellen confirmed that she is ready to take further measures to ensure that US bank deposits remain safe.
And it may have to respect the situation as the pressures show with the Fed’s discount window borrowing of $110.2 billion as of Wednesday.
In addition, lending from the Fed’s new bank financing program swelled to $53.7 billion, while loans to foreign central banks rose to $60 billion.
With this in mind, the market has begun to make a case for the Federal Reserve to end its rate hike cycle earlier than previously imagined, to the detriment of the dollar, especially after Fed Chair Jerome Powell indicated that central bank policymakers had considered Like this move last week.
“Markets, so far, do not have confidence in the Fed’s ability to independently address inflation and financial stability,” analysts at ING said in a note. “And this is unlikely to change soon, meaning that interest rate expectations should remain closely linked to developments in the banking crisis.”
Elsewhere, the GBP/USD traded 0.1% lower at 1.2271 after touching a seven-week high of 1.2344 on Thursday.
UK retail sales unexpectedly rebounded by 1.2% in February from the previous month, bringing sales volumes back to a pre-pandemic level, but this had little effect on the Bank of England after the Bank of England hinted on Thursday that it might have He ended his series of interest rate increases.
The EUR/USD rose to 1.0833 after climbing to a seven-week high of 1.0931 on Thursday.
ECB President Christine Lagarde is scheduled to speak at the European Council meeting later in the session and is expected to confirm that the fight against inflation remains on and there will be no talk of easing monetary policy in the near term.
ING note added: “We believe 1.1000 could be tested [يورو / دولار أمريكي] Soon, as the dollar should remain mostly bearish, European currencies are supported by hawkish central banks and a calmer banking environment.”
AUD/USD was up 0.1% at 0.6691, USD/USD was down 0.4% at 130.26, while USD/CNY was up 0.4% at 6.8487.
