The U.S. dollar is actively declining against most world currencies on Monday morning as traders react to news about the bankruptcy of two U.S. banks.
The ICE-calculated index showing the U.S. dollar’s performance against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona) fell 0.7% during this morning’s session.
The euro/dollar pair is trading at $1.0720 as of 8:33 a.m. Q, versus $1.0642 at the close of last Friday’s session, with the euro adding about 0.73%.
The pound sterling is up 0.65% and is trading at $1.2114 versus $1.2034 at the close of last session.
The dollar-yen exchange rate is down 0.45% to trade at 134.40 yen.
As reported, the U.S. bank Silicon Valley Bank has come under the management of the Federal Deposit Insurance Corporation (FDIC). The FDIC will sell the assets of Silicon Valley Bank, which will allow payments on uninsured deposits. The bank’s bankruptcy was the largest since the 2008 financial crisis.
Regulators also shut down Signature Bank, a smaller New York bank that was popular with cryptocurrency holders.
Investors fear the problems at U.S. banks could spill over to the global financial industry, MarketWatch wrote. However, statements by regulators about their readiness to support the banking sector, including through the provision of concessional financing, have somewhat calmed market participants.
Also traders believe that against the background of problems in the financial sphere the Federal Reserve may soften its approach to the monetary policy, having made the decision to increase the key interest rate by 25 basic points at the March meeting instead of raising it by 50 bps.
